Within the aggregate demand/aggregate supply framework, the quantity produced and purchased in the goods and services market represents
a. nominal output or nominal GDP.
b. the interest rate.
c. real output or real GDP.
d. the consumer price index.
C
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Consumption spending will ________ when disposable income ________
A) increase; decreases B) decrease; increases C) change unpredictably; decreases D) increase; increases
Which one of the following statements is correct?
A) Even if government programs are implemented with good intentions, they may still lead to undesirable outcomes. B) When evaluating a government program, it is vitally important to consider the stated intentions of its proponents. C) If policymakers have good intentions, their proposals will lead to desirable outcomes. D) From the standpoint of economic efficiency, it makes no sense to consider the secondary effects generated by a new government program.
A firm is currently producing at the rate of output at which total revenues just cover its total variable costs. If demand falls, the firm should
A. not change its rate of output because it is still covering its variable costs. B. shut down. C. lower both price and its rate of output. D. increase its rate of output to make up for the lower price.
A tax placed on imports is known as
A. tariff. B. quota. C. voluntary restraint agreement. D. infant industry.