One reason that the aggregate demand curve slopes downward is because
A. higher price levels increase real wealth and consumption.
B. higher price levels increase investment.
C. higher price levels reduce net exports.
D. higher price levels reduce interest rates.
Answer: C
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The tools of monetary policy are
A) government spending, tax rates, and the required reserve ratio. B) open market operations, differential between the discount rate and the federal funds rate, and the required reserve ratio. C) open market operations, differential between the discount rate and the federal funds rate, and tax rates. D) open market operations, government spending, and the required reserve ratio.
A shortage will occur if:
A. the quantity being supplied at a given price is less than the quantity demanded at that price. B. the quantity being supplied at a given price exceeds the quantity demanded at that price. C. there are not enough buyers in the market. D. there are only inexperienced firms in the market.
A point inside the production possibilities curve illustrates a situation in which resources are not fully employed
a. True b. False
The study of economics would be superfluous if __________ did not exist
a. demand b. capital c. corporations d. profit e. scarcity