Which of the following is true of Simple Keynesian model?
a. Price level increases with an increase in aggregate demand
b. The aggregate supply curve is assumed to be perfectly inelastic.
c. The aggregate demand curve is assumed to be perfectly elastic.
d. Price level is solely determined by the aggregate demand curve.
e. Changes in aggregate demand determines equilibrium real GDP.
e
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Explain Tobin's idea of "Don't put all your eggs in one basket."
What will be an ideal response?
Over the past few decades, nominal interest rates have been higher than real rates of interest. This means that
A. lenders must have expected inflation. B. borrowers must have expected deflation. C. lenders must have expected prices to fall. D. borrowers must have expected prices to fall.
Which of the following decreases in labor demand is due to a change in the price of a related resource?
A. A decline in the demand for computers in Europe reduces the demand for workers in the domestic computer industry B. The rise of hair salons for both men and women reduces the demand for barbers C. A decrease in the educational skills of manufacturing workers decreases the demand for such workers D. An increase in the price of chemical equipment increases the cost of producing fertilizer, thus decreasing the demand for workers who make fertilizer
In a large open economy ________
A) the effect of shifts in saving and investment on the trade balance are in the same direction as in a closed economy B) the effect of shifts in saving and investment on net capital flows are in the same direction as in a closed economy C) the effect of shifts in saving and investment on the domestic real interest rate and the actual levels of saving and investment are in the same direction as in a closed economy D) all of the above E) none of the above