When deriving the aggregate demand (AD) curve from the aggregate expenditures model, an increase in U.S. product prices would cause an increase in:
A. the value of household wealth and lower consumption expenditures.
B. interest rates and lower investment expenditures.
C. exports and imports.
D. U.S. resource prices and an increase in aggregate supply.
B. interest rates and lower investment expenditures.
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The government's policy of reducing payments for physicians' services has generated a relative
A) increase in the number of physicians in the program. B) reduction in the number of physicians in the program. C) reduction in the demand for medical services. D) increase in the income of the physicians remaining in the program.
Policy makers:
A. dislike inflation because it redistributes income. B. dislike inflation because it allows individuals to maintain illusions. C. like inflation because it allows individuals to maintain illusions. D. like inflation because it makes society richer.