The level of aggregate expenditure in the private closed Economy is determined by the
A) expenditures of consumers and businesses.
B) intersection of the saving schedule and the 45-degree line.
C) equality of the MPC and MPS.
D) intersection of the saving and consumption schedules.
Ans: A) expenditures of consumers and businesses.
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Define the following terms and explain their importance to the study of economics
a. price elasticity b. complements c. substitutes d. cross elasticity e. supply elasticity
A market is said to be in disequilibrium if
A) it exhibits either a surplus or a shortage. B) the number of units that individuals are willing to buy exceeds the number of units they can afford. C) it is a market for an inferior good. D) none of the above
What would likely happen to the long-run aggregate supply curve if the U.S. federal government decreases marginal tax rates on wages?
A. The LRAS curve would shift leftward. B. The LRAS curve would remain stable while the AD curve would shift leftward. C. The LRAS curve would shift rightward. D. The LRAS curve would remain stable while the AD curve would shift rightward.
The multiple by which the commercial banking system can expand the supply of money is equal to the
A. reciprocal of the federal funds rate. B. ratio of actual reserves to required reserves. C. reciprocal of the reserve ratio. D. ratio of required reserves to actual reserves.