The expenditure multiplier concept of the aggregate-expenditures model:
A. Is not at all relevant in the AD-AS model
B. Magnifies the shifts of the aggregate demand curve
C. Explains movement up or down the aggregate demand curve
D. Reverses the shift of the aggregate demand curve
B. Magnifies the shifts of the aggregate demand curve
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The formula for aggregate expenditure is
A) AE = C + I + depreciation - NX. B) AE = C + I + G. C) AE = C + I + G - NX. D) AE = C + I + G + NX.
Which of the following states the definition of supply?
A. More of a good is supplied at a lower price. B. There is a positive relationship between the price of a good and the quantity that buyers purchase. C. There is a positive relationship between the price of a good and the quantity offered for sale by suppliers. D. There is a negative relationship between the price of a good and the quantity offered for sale by suppliers.
"Partial" crowding out of fiscal policy occurs when the
A) LM curve is horizontal. B) LM curve is upward-sloping. C) LM curve is vertical. D) IS curve is vertical.
The supply for products that exhibit cost externalities is generally ________ the supply for products that do not
A) greater than B) less than C) the same as D) greater or less (depending on the market) than