The relationship between the aggregate demand curve and the aggregate expenditures model is derived from the fact that a(n) ________.
A. decrease in the price level shifts the aggregate expenditures schedule downward and decreases equilibrium GDP
B. increase in the price level shifts the aggregate expenditures schedule downward and increases equilibrium GDP
C. increase in the price level shifts the aggregate expenditures schedule upward and decreases equilibrium GDP
D. decrease in the price level shifts the aggregate expenditures schedule upward and increases equilibrium GDP
Answer: D
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For the same sized substitution effect, own-price demand curves for inferior goods are steeper than own price demand curves for normal goods.
Answer the following statement true (T) or false (F)
When the government eliminated Regulation Q in the 1980s, allowing S&Ls to raise interest rates in order to keep their depositors from switching their deposits to competing investment houses, many S&Ls were doomed because
a. they were locked into fixed, long-term mortgage loans at rates often lower than what they paid depositors, forcing them into more risky but higher interest-yielding loanventures b. they refused to finance (loan) speculative land development projects at a time when land values were skyrocketing, losing the opportunity to recoup losses caused by theelimination of Regulation Q c. they ventured abroad, mainly to the Middle East, for prospective borrowers and fell victim to the political instability of those ventures d. the Federal Reserve also raised interest rates, causing a general slowdown in the economy, which eventually affected S&L profitability e. member savings and loans quit the FSLIC in protest of the new rules
A firm uses labor and capital in its production process, and it faces competitive markets for its inputs and output. The firm's long-run labor demand curve
A) intersects with the short-run labor demand curve in several points. B) is exactly identical to its short-run labor demand curve. C) is steeper than its short-run labor demand curve. D) is flatter than its short-run labor demand curve.
State at least one economic benefit to increased international trade.
What will be an ideal response?