What would happen to aggregate demand if the federal government increased military purchases and state and local governments increased their road building budgets at the same time?
a. AD would increase
b. AD would increase, because only federal government purchases affect AD.
c. AD would increase only if the change in federal purchases were smaller than the change in state and local purchases.
d. AD would decrease only if the change in federal purchases was smaller than the change in state and local purchases.
a
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Which of the following paired concepts are equivalent to each other?
a) increasing returns; diseconomies of scale b) increasing returns; increasing costs c) increasing returns; decreasing costs d) increasing costs; economies of scale e) constant costs; economies of scale
A person is preparing for a long automobile trip and cashes in a certificate of deposit for cash in case of emergencies along the way. This is an example of the
A) transactions demand for money. B) asset demand for money. C) precautionary demand for money. D) wealth demand for money.