Assume a decrease in interest rates causes an initial increase in desired investment and aggregate demand. Additional increases in aggregate demand will
A. Be caused by increases in induced expenditures.
B. Be insignificant compared to the initial increase.
C. Be caused by multiplier-induced increases in autonomous investment.
D. Not occur.
Answer: A
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A. True B. False C. Uncertain
Which of these signifies the role of money in any economy? a. It acts as a tool for poverty alleviation in an economy
b. It serves as a medium of exchange in an economy. c. It indicates the economic wellbeing of a nation. d. It helps to differentiate between the nominal and real income of a nation. e. It is a clear indicator of the growth in national income.
Either an increase in autonomous net taxes or a decrease in government purchases can close an expansionary gap
a. True b. False Indicate whether the statement is true or false
The goods and services that are used in the production of other goods and services are called: a. gross domestic goods. b. intermediate goods
c. final goods. d. ultimate goods.