The labels for the axes of the aggregate demand graph should be:
a. Quantity of a product on the vertical axis and the price of a product on the horizontal axis
b. Real domestic output on the vertical axis and the price level on the horizontal axis
c. Price of a product on the vertical axis and quantity of a product on the horizontal axis
d. Real domestic output on the horizontal axis and the price level on the vertical axis
d. Real domestic output on the horizontal axis and the price level on the vertical axis
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An example of automatic fiscal policy is
A) an interest rate cut, initiated by an act of Congress. B) an increase in the quantity of money. C) a tax cut, initiated by an act of Congress. D) a decrease in tax revenues, triggered by the state of the economy. E) any change in the interest rate, regardless of its cause.
The market demand function for wheat is Qd = 10 - 2P and the market supply function is Qs = 4P - 2, both measured in billions of bushels per year. Suppose the government wants to increase the price of wheat to $3/bushel and they impose a voluntary production reduction program to achieve their goal. What is the size of the aggregate surplus?
A. $4 billion B. $12 billion C. $10 billion D. $6 billion
What do you feel would be the effect of a mandate that requires all people to purchase health insurance?
What will be an ideal response?
The necessity for choice, in economics, arises from
A. high incomes and many available goods. B. scarcity of economic means for satisfying economic wants. C. limited numbers of producers. D. All of the responses are correct.