Which of the following is true of the classical model?
a. Changes in aggregate demand does not have any impact on the aggregate price level.
b. The aggregate supply curve is perfectly elastic.
c. An increase in aggregate demand increases the price level, output remaining unchanged.
d. Changes in aggregate demand determines the equilibrium output of the economy.
e. Real GDP and price level remain unchanged irrespective of changes in aggregate demand and supply.
c
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State and local governments subsidize college students with grants and low-interest loans. The loans and subsidies are examples of
A) emission allowances. B) Coase subsidies. C) Pigovian subsidies. D) positive externalities.
Which if the following is the best example of a public good?
a. Bread. b. Fish in the ocean. c. Scrambled satellite broadcasts. d. National defense.