CHAPTER 11 - CHAPTER 11 1. The aggregate demand curve is:...

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CHAPTER 11 1. The aggregate demand curve is: A) vertical if full employment exists. B) horizontal when there is considerable unemployment in the economy. C) downsloping because of the interest-rate, wealth or real balances, and foreign purchases effects. D) downsloping because production costs decrease as real output increases. Ans: C 2. The interest-rate and real balances effects are important because they help explain: A) rightward and leftward shifts of the aggregate demand curve. B) why demand-management policy cannot be used effectively to curb stagflation. C) the shape of the aggregate demand curve. D) the shape of the aggregate supply curve. Ans: C 3. The determinants of aggregate demand: A) explain why the aggregate demand curve is downsloping. B) explain shifts in the aggregate demand curve. C) demonstrate why real output and the price level are inversely related. D) include input prices and resource productivity.
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This note was uploaded on 10/15/2009 for the course ECON 2302 taught by Professor Parker during the Spring '09 term at University of Texas-Tyler.

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CHAPTER 11 - CHAPTER 11 1. The aggregate demand curve is:...

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