In the long run, the price level in an economy is determined solely by:
a. the aggregate demand curve.
b. the amount of cyclical unemployment in the economy.
c. the long-run aggregate supply curve.
d. the short-run aggregate supply curve.
e. the actual output level.
Ans: a. the aggregate demand curve.
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Which of the following does not reflect a positive rate of time preference?
a. People are willing to pay high prices to see new movies at first-run theaters. b. A bank pays interest on savings accounts. c. Ed puts money in his mattress for a rainy day. d. Dry cleaners that provide faster service can charge more. e. A college freshman parties all semester, then stays awake studying for 50 straight hours during final exam week.
Briefly explain how changes in business taxes would affect aggregate demand. Give an example.
What will be an ideal response?
Aggregate income is the sum of:
A. employee compensation, rent, and profits. B. employee compensation, rent, profits, interest, and transfer payments. C. employee compensation and profits. D. employee compensation, rent, profits, and interest.
The further in the future a payment is received, the more it is worth today.
Answer the following statement true (T) or false (F)