If the aggregate supply curve is horizontal,
A. there are unemployed resources.
B. the economy is inside the production possibilities frontier.
C. it is possible to increase output, without driving up prices, by putting unemployed resources to work.
D. All of the choices are correct.
D. All of the choices are correct.
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Taxes are the difference between
a. GDP and net exports. b. GDP and consumer spending. c. Consumer spending and saving. d. GDP and disposable income.
According to the maximin criterion, income should be transferred from the rich to the poor as long as it
a. raises the well-being of the least fortunate. b. does not alter incentives to work and save. c. promotes an equal distribution of income. d. does not lower the welfare of the elderly.
Related to the Economics in Practice on p. 572: According to the study cited in the Economics in Practice, wages tend to
A. change in lock step with changes in the price level. B. remain rigid in both and upward and downward direction. C. remain unchanged for about a year, which tells us that average wages change must less than average prices. D. behave in a way that contradicts the theory of sticky wages.
Refer to the information provided in Table 36.3 below to answer the question(s) that follow. Table 36.3 PointAggregate Income (Y)Aggregate Consumption (C) A 15 19 B 30 23 C 45 27 D 60 31 E 75 35 F 90 39The data in the table was used to estimate the following consumption function: C = 20 + 0.2YRefer to Table 36.3. The error for point E is equal to
A. -2. B. 0. C. +1. D. +3.