Which of the following will increase aggregate demand in the United States?
A. a higher price level
B. an increase in the real interest rate
C. an increase in wealth due to a substantial appreciation in the value of stocks
D. a decrease in real income in Japan and Western Europe
Answer: C
You might also like to view...
The concept of opportunity cost in a fully employed economy with technology and resources held constant tells us that
A. expansion of output in one industry means expansion cannot occur in another industry. B. expansion of output in one industry means output in another industry must contract. C. output cannot be increased in any industry. D. output of all industries must contract until more resources are found.
If the CPI is 170 at the beginning of the year and 181 at the end, and a bank is paying a nominal interest rate of 6 percent, we see that
A) the real interest rate is positive and is less than 1 percent. B) the interest nominal rate is negative. C) the real interest rate is negative. D) the real interest rate is positive and is larger than 1 percent. E) the real interest rate is equal to zero.
In general, a society will benefit more, the more self-sufficient it is
a. True b. False
Which of the following statements best describes price ceilings?
a. A price ceiling that is set at a relatively high level is nonbinding. b. A price ceiling that is set at a relatively low level is nonbinding. c. A price ceiling that is set at a relatively high level will have no practical effect unless the equilibrium price falls below the price ceiling. d. A price ceiling that is set at a relatively low level will have no practical effect unless the equilibrium price soars high enough to exceed the price ceiling.