Refer to the information provided in Figure 28.7 below to answer the question(s) that follow.
Figure 28.7Refer to Figure 28.7. If the economy is at Point B, the cost of raw material decreased dramatically, and the aggregate demand did not change, the economy could move to Point
A. A.
B. E.
C. C.
D. D.
Answer: B
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A modern economy has millions of goods and services whose prices are continually increasing and decreasing based on supply and demand.
Select whether the statement is true or false. A. True B. False
Refer to Table 9.2. (Data are expressed in billions of dollars.)Table 9.2Full Employment Income (Output)Consumers Desire to SpendInvestors Desire to SpendTotal Private SpendingTotal Saving$500$300$250$________$________600375250$________$________700450250$________$________800525250$________$________If the full-employment level of income (YF) in Table 9.2 is $700 billion,
A. There is an inflationary gap of $450 billion. B. There is an inflationary gap of $700 billion. C. The economy is in equilibrium. D. There is a recessionary gap of $250 billion.
Compare the determinants of consumption with investment. Most economists regard investment as being less stable than consumption. Looking at the determinants of each factor, support this contention.
What will be an ideal response?
An example of a cost externality occurs when a mining company
A) dumps waste in river upstream from a popular fishing spot. B) produces coal that is not in demand in a recession. C) underpays its employees. D) overwork its employees.