In a certain economy, the components of aggregate spending are given by: C = 500 + 0.8(Y - T) - 300rI = 200 - 400rG = 200NX = 10T = 150 Given the information about the economy above, which expression below also states aggregate expenditure?
A. [910 - 700r]
B. [910 - 700r] + 0.8Y
C. [790 - 700r]
D. [790 - 700r] + 0.8Y
Answer: D
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All of the following are reasons for the downward-sloping aggregate demand curve except
A) as the price level decreases, the quantity demanded of real GDP decreases because goods and services are more expensive. B) as the price level increases, the real value of household wealth declines, reducing consumption. C) a higher price level increases the demand for money, causing an increase in the interest rate which reduces spending on investment goods and consumer durables. D) if the price level rises in a country relative to price levels in other countries, net exports will decrease in the original country.
In the presence of a negative externality in production, a monopoly will produce
A) more than the social optimum. B) less than the social optimum. C) the social optimum. D) All of the above are possible.
Marginal product is defined as
a. the increase in revenue that occurs when an additional unit of a resource is added b. the increase in output that occurs when all resources are increased by the same proportion c. the increase in output that occurs when an additional unit of a resource is added, holding all other resources constant d. the amount of additional resources needed to increase output by one unit when all resources are increased by the same amount e. the amount of additional money needed to increase output by one unit when all resources are held constant
A period of sustained decline in output in an economy is known as a(n) _____
a. expansion b. stagnation c. peak d. trough e. contraction