Why does the economy's aggregate demand curve have a negative slope?
At higher price levels, the quantity of bank reserves demanded is greater. If the Fed holds the supply schedule fixed, a higher price level must therefore lead to higher interest rates. Because higher interest rates discourage investment, aggregate quantity demanded is lower when the price level is higher?that is, the aggregate demand curve has a negative slope.
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The figure above shows the relationship between the journey length and the cost of trip per mile. The curve becomes flatter because as the journey length increases,
A) the cost per mile increases. B) the fall in the cost per mile becomes greater. C) the cost per mile remains unchanged. D) the cost per mile decreases. E) the fall in the cost per mile becomes smaller.
Depositors lack of information about the quality of bank assets can lead to
A) bank panics. B) bank booms. C) sequencing. D) asset transformation.
Refer to Table 2.3. Assume that 2010 is the base year. Real GDP in 2013 is
A) $688.00. B) $794.00. C) $812.00. D) $961.00.
Which economic concept explains why a large drugstore chain can produce at a lower average cost than Whoville Pharmacy, an individually owned drugstore?
a. increasing marginal returns b. diminishing marginal returns c. economies of scale d. diseconomies of scale e. constant returns to scale