The aggregate demand curve slopes:
A. downward, like individual supply curves.
B. upward, like individual supply curves.
C. downward, like individual demand curves.
D. upward, like individual demand curves.
Answer: C
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The table above lists six points on the production possibilities frontier for grain and cars. What is the opportunity cost of producing the 26th car?
A) 2 tons of grain per car B) 4 tons of grain per car C) 0.25 tons of grain per car D) 0.5 tons of grain per car
In a competitive market, an efficient allocation of resources is characterized by
a. a price greater than the marginal cost of production. b. the possibility of further mutually beneficial transactions. c. the largest possible sum of consumer and producer surplus. d. a value of consumer surplus equal to that of producer surplus.
The measurements of business cycles tend to be exaggerated as a result of the GDP treatment of
a. services. b. perishable goods. c. government services. d. durable goods.
If the price of inputs falls and the level of consumer indebtedness rises:
a. Aggregate demand rises, but aggregate supply does not change. b. Aggregate demand falls, and aggregate supply rises. c. Aggregate demand and aggregate supply rise. d. Neither aggregate demand nor aggregate supply change. e. Aggregate demand rises, and aggregate supply falls.