The aggregate demand curve plots
A) total expenditures against the level of employment.
B) desired expenditures against production.
C) employment against the price level.
D) planned expenditures against the price level.
D
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Use the following diagram to answer the next question.
The move from point 1 to point 2 in the diagram represents ________.
A. a decrease in both the unemployment rate and the inflation rate B. a decrease in the unemployment rate and an increase in the inflation rate C. an increase in the unemployment rate and a decrease in the inflation rate D. an increase in both the unemployment rate and the inflation rate
An increase in the discount rate ________ bank reserves and ________ the money supply if banks with outstanding loans are encouraged to pay them back more quickly
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
Oligopolists use advertising as a way of differentiating their products.
Answer the following statement true (T) or false (F)
Expectations are taken to be rational in ________
A) traditional Keynesian and new Keynesian theory B) new Keynesian and real business cycle theory C) real business cycle and traditional Keynesian theory D) traditional Keynesian, new Keynesian and real business cycle theory