In the aggregate expenditure model, which of the following variables is assumed to be independent of real GDP?
A. consumption
B. saving
C. investment
D. profit
Answer: C
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Apple just announced it will be coming out with the newest model iPhone in the next six months. One could reasonably expect demand for the current model of iPhone to:
A. decrease due to a change in expectations of future prices. B. increase due to a change in expectations of future prices. C. increase due to limited supply of the current model. D. decrease due to the change in price of a substitute good.
If the price level in an economy rises and its output level decreases as it gravitates toward its potential GDP, then: a. a policy to manipulate the aggregate supply is being used
b. an active approach to correcting a recessionary gap is being used. c. an active approach to correcting an expansionary gap is being used. d. a passive approach to correcting a recessionary gap is being used. e. a passive approach to correcting an expansionary gap is being used.
If the MU of half gallon of milk is $3.50 and the MU of gallon of milk is $3.25, and they both sell for the same price, we would expect consumers to
a. increase their purchases of gallons of milk. b. increase their purchases of half gallons of milk. c. not change their purchasing habits. d. buy only gallons of milk.
Fundamentally, countertrade is best described as a(n) ________ transaction.
A) simple B) common C) desirable D) inefficient