Explain how does a rise in real income affect aggregate demand?
What will be an ideal response?
A rise in domestic real income, Y, leads to a rise in disposable income, Yd. This raises the spending on imports, IM, thus lowering the current account, CA, and reducing aggregate demand, AD. However, the rise in Yd also causes a rise in consumption, C, and raises aggregate demand, AD, by more than the corresponding decrease.
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In the above table, the number of marginally attached workers is
A) 40 million. B) 55 million. C) 15 million. D) 100 million.
Market share can be computed by dividing
A. Price by average total cost. B. The amount that a buyer buys by the total amount that is produced in the market. C. Profit by total cost. D. The amount sold by a single firm by the total sold in the market.
National savings is important for all of the following reasons EXCEPT
A) it can be used to consume additional foreign goods. B) it can be used to fund private investment. C) it can be used to fund government investment. D) it can be used to fund foreign investment.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. For this economy to move from Point C to Point B, ________ additional LCD TVs could be produced when the production of OLED TVs is reduced by 20.
A. exactly 30 B. exactly 60 C. fewer than 30 D. more than 30