Which of the following is a TRUE statement?
A. The C + I + G + X curve has no relationship to the aggregate demand curve other than some of the variables that affect one curve also affect the other.
B. The C + I + G + X curve is used to derive the aggregate demand curve, but the aggregate demand curve is drawn for one price level.
C. The C + I + G + X curve is used to derive the aggregate demand curve, but the
C + I + G + X curve is drawn for one price level while price levels vary along the aggregate demand curve.
D. Both the C + I + G + X curve and the aggregate demand curve are drawn for one price level.
Answer: C
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The costs of investment depend on the ________ and the ________.
A. price of new capital goods; real interest rate B. relative price of the firm's output; real interest rate C. marginal product of capital; relative price of the firm's output D. taxes levied on the revenue generated; relative price of the firm's output
The debt burden in the United States was highest during
A) the 1980s. B) the 1960s. C) World War II. D) World War I.
Figure 10-4
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In Figure 10-4, if full employment occurs at an output level of 4,000 and the economy is currently at an output level of 5,000, then we can expect a(n)
A. increase in autonomous consumer spending that shifts the aggregate demand curve to the left. B. increase in wages that will shift the aggregate supply curve to the left. C. decrease in investment spending that shifts the aggregate demand curve to the left. D. decrease in wages that will shift the aggregate supply curve to the left.
Your classmates from the University of Chicago are planning to go to Miami for spring break, and you are undecided about whether you should go with them. The round-trip airfares are $600, but you have a frequent-flyer coupon worth $500 that you could use to pay part of the airfare. All other costs for the vacation are exactly $900. The most you would be willing to pay for the trip is $1400. Your only alternative use for your frequent-flyer coupon is for your trip to Atlanta two weeks after the break to attend your sister's graduation, which your parents are forcing you to attend. The Chicago-Atlanta round-trip airfares are $450. If you do not use the frequent-flyer coupon to fly to Miami, should you go to Miami?
A. Yes, your benefit is equal to your cost. B. Yes, your benefit is more than your cost. C. No, your benefit is less than your cost. D. No, because there are no benefits in the trip.