The aggregate output demanded for a given price level occurs at the point where:
a. an economy reaches the full employment of labor.
b. aggregate expenditure equals real GDP
c. actual aggregate expenditures exceeds real GDP.
d. inventories of goods and services are increasing.
e. inventories of goods and services are decreasing.
b
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Why do necessities tend to have demand that is price inelastic, while luxuries tend to have demand that is price elastic?
What will be an ideal response?
Suppose the price of good X falls. As a result, the quantity demanded for good X increases for a particular consumer. For this consumer, the substitution effect induced the consumer to purchase more X while the income effect induced the consumer to purchase less X. We can infer that X is a(n)
a. normal good. b. inferior good. c. Giffen good. d. luxury good.
What is a contestable market?
What will be an ideal response?
A model refers to:
A) a perfect replica of reality. B) a simplified description, or representation, of reality. C) facts, measurements, or statistics that describe the world. D) a set of facts established by observation and measurement.