The difference between an absolute price and a relative price is that:
a. absolute prices are based on costs of production, relative prices are based on market exchange.
b. absolute prices are in terms of currency, relative prices are in terms of another good.
c. absolute prices are in terms of another good, relative prices are in terms of currency.
d. absolute prices never change, relative prices change with inflation.
b. absolute prices are in terms of currency, relative prices are in terms of another good.
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Fiscal policy: a. uses the federal government's powers of spending and taxation to affect employment, the price level, and GDP. b. uses the federal government's control over the money supply and interest rates to affect employment, the price level, and GDP. c. can affect employment and prices, but not the level of GDP
d. can affect employment and the level of GDP, but not the price level. e. is most effective when employed by state governments rather than by the federal government.
The only way by which government can affect aggregate demand is through changes in its own purchases
a. True b. False Indicate whether the statement is true or false