In the aggregate expenditure (AE) model, the economy is driven to its equilibrium by changes in
A) autonomous expenditures that are the result of changes in real GDP.
B) investment that are the result of changes in real GDP.
C) induced expenditures that are the result of changes in real GDP.
D) net taxes that are the result of changes in real GDP.
E) government expenditures on goods and services that are the result of changes in real GDP.
C
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A(n) ________ is represented by a rightward shift of the demand curve while a(n) ________ is represented by a movement along a given demand curve
A) increase in quantity demanded; increase in demand B) decrease in demand; decrease in quantity demanded C) increase in demand; increase in quantity demanded D) increase in demand; decrease in demand
Assume that Australia has a comparative advantage in producing surfboards and New Zealand imports surfboards from Australia. We can conclude that
A) Labor costs are higher for surfboard producers in New Zealand than in Australia. B) Australia also has an absolute advantage in producing surfboards relative to New Zealand. C) Australia has a lower opportunity cost of producing surfboards relative to New Zealand. D) New Zealand has an absolute disadvantage in producing surfboards relative to Australia.