In the Keynesian aggregate expenditures model, "aggregate expenditures" refer to:
a. the amount of GDP that could be produced if unemployment were zero.
b. the combined expenditures of consumers, businesses, governments, and foreigners (net exports).
c. the amount of demand for consumer goods that would arise if all citizens had all the income they wanted.
d. consumer spending measured in constant prices.
b
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If the marginal propensity to save (MPS) is 0.25, the value of the spending multiplier is:
a. 1. b. 2. c. 4. d. 9.
When a nuclear-powered electrical plant is permitted to dump radioactive waste at no cost into a recreational waterway lowering the value boaters receive from the waterway, the
a. firm's cost of producing electricity will be higher than the community's true opportunity cost. b. firm will tend to produce too little electricity from the viewpoint of economic efficiency. c. community generally receives an external benefit from the production of electricity. d. firm's cost of producing electricity will be lower than the community's true opportunity cost.