The demand curve shows the relationship between quantity demanded and
A) income.
B) price.
C) supply.
D) quantity supplied.
Answer: B
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A macroeconomic model obeys the "natural rate hypothesis" by incorporating
A) the assumption of nominal wage stickiness. B) a vertical LAS curve. C) imperfect information. D) a vertical AD curve.
Answer the following statements true (T) or false (F)
1. In the expenditures approach, transfer payments such as unemployment compensation are included in the G component of GDP. 2. National income (NI) is estimated as the sum of four categories of income (wages, rent, interest, profits) plus taxes on production and imports. 3. Personal income (PI) is the income that households are free to spend or save as they please. 4. Disposable income (DI) includes transfer payments like Social Security benefits and unemployment benefits.