Consumption is the purchase of goods and services by:
a. households
b. government.
c. business firms.
d. foreign buyers.
a
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Which of the following changes would probably not lead to an increase in aggregate expenditure?
a. an increase in aggregate wage income b. an increased mood of optimism about the nation's economic prospects c. an increase in the value of corporate stocks d. a decrease in the income tax rate e. an increase in the interest rate
Higher inflation results in
a. more frequent price changes and increased variability of relative prices. b. more frequent price changes and decreased variability of relative prices. c. less frequent price changes and increased variability of relative prices. d. less frequent price changes and decreased variability of relative prices.
Government policies that are used to affect planned aggregate expenditure, with the objective of eliminating output gaps, are called ________ policies.
A. cyclical B. stabilization C. productivity D. structural
Which of the following is true when an economy is producing efficiently?
A. The economy is producing outside the production possibilities curve. B. Everyone in the economy is happy. C. The economy is producing on the production possibilities curve. D. The economy is getting the fewest goods and services from the available resources.