The equilibrium of national income occurs where aggregate demand is equal to aggregate supply, also called O a. Effective demand а. b. National income c. Full employment O d. Underemployment

Which of the following fall during a recession? O both retail sales and employment O retail sales but not employment O employment but not retail sales O neither employment nor retail sales

An increase in taxes when the economy is above full employment OA. increases; falls B. increases; rises O C. does not change; does not change O D. decreases; falls aggregate demand and real GDP, and the price level

QUESTION 16 Which items are added together to get Gross Domestic Product? OA. Consumption, government spending, net exports, and treasury bonds O B. Consumption, Interest payments, government spending, and net export OC Consumption, investment, government spending, and net exports O D.Consumption, aggregate demand, aggregate supply, and net exports QUESTION 17 Which of the following would NOT be included in GDP? OA. a haircut at Styles of tomorrow OB. Buying 1.000 s of Amazon Stock OC Buying gasoline at Exxon Mobil O D. All of the above woud be included QUESTION 18 A policeman's salary would fall under which component of GDP? OA consumer spending OB. private investment OC. government purchase O D-net exports QUESTION 19 In the market for paperback books, more people are reading books on kindles and ipads. Which of the following is likely to occur O A. The demand curve for paper back books will shift to the right O B. Nane af the above O The supply curve of paperback books will shift to…

illustrates and how it is related to the aggregate demand curve. 3. Figure 11.8 shows the aggregate expenditure curve when the price level is 110. When the price level rises to 120, the AE curve shifts vertically downwards from AE, by $1 trillion. When the price level falls to 100, the AE curve shifts vertically upwards from AE, by $1 trillion. Figure 11.8: FIGURE 11.8 Short Answer Problem 10 (a) 8 Price level (GDP deflator) Aggregate planned expendit (trillions o FIGURE 11.9 Short Answer Problem 10 (b) 130 a. Draw two new AE curves in figure 11.8 for the price levels of 100 and 120. What are the equilibrium levels of aggregate expenditures for these two price levels? Label as 'b' the equilibrium point when the price level is 100 and 'c' as price level is 120. 120 b. Use figure 11.8 to obtain three points 'a', 'b' and 'c' on the aggregate demand curve. Plot these three points on figure 11.9. Assume that the aggregate demand curve is linear and draw the AD curve on figure 11.9. Figure…

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Moving to another question will save this response. Question 8 In an open mixed economy, the inflationary expenditure gap may be described as the O A. excess of GDP over Ca + lg +Xn +G at the full-employment output. O B. excess of Sa + M +T over lg +X+ G at the full-employment GDP. O C. excess of Ca + lg +Xn + G at the full-employment GDP. O D.extra consumption that occurs when investment increases in a full-employment economy. A Moving to another question will save this response.

Exhibit 13-1 Price Level a aa H LRAS Real GDP SRAS, Select one: O a. A-E-B-H-C O b. A-E-G-I-C O c. A-D-B-E-A O d. A-D-B-H-C e. A-E-B-I-C SRAS2 SRAS AD₁ ADS 32. Refer to Exhibit 13-1. A continued increase in the price of oil, combined with Fed attempts to respond to these oil shocks by increasing aggregate demand, is likely to take the economy along which of the following paths?

5 k es Price Level 170 150 130 110 90 The Economy of Morin 70 460 480 500 520 54535,75 580 600 Real GDP AD AS a. If potential GDP (LAS) is $550, and the economy is presently in equilibrium, then there is a(n) [recessionary b. In order to close this gap aggregate demand must increase by $ billion. gap of $ billion. c. If every $1 change in government spending leads to a $4 change in aggregate demand, government spending must increase by $ billion.

Suppose that the economy is presently operating at full employment. If there is an increase in national income, which of the following will occur automatically? O A. An increase in tax rates. O B. An increase in unemployment compensation spending. O C. An increase in tax revenues. O D. A decrease in tax rates.