In Figure 9.2, if the consumption function shifts from C2 to C1, autonomous consumption
A. Decreases, and aggregate demand shifts to the left.
B. Decreases, and aggregate demand shifts to the right.
C. Increases, and aggregate demand shifts to the left.
D. Increases, and aggregate demand shifts to the right.
Answer: A
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Goods and services such as environmental quality, leisure time, and household production are not included in GDP because they are not
A) productive activities. B) for consumption. C) bought in markets. D) made for profit. E) really durable goods.
The effect of trade on specialized employees of import-competing industries will be ________ jobs and ________ pay because they are relatively ________
A) fewer; lower; immobile B) fewer; lower; mobile C) more; lower; immobile D) more; higher; mobile E) more; higher; immobile
The variable G considered in the model encompasses
A) government expenses on goods. B) government expenses on goods and services. C) government expenses on goods and services as well as transfers. D) government expenses on goods and services as well as transfers and public debt service.
Assuming price elasticity of demand is reported as an absolute value, a price elasticity of demand less than one indicates demand for the good is:
A. elastic. B. inelastic. C. unitary elastic. D. unrelated to price.