Aggregate demand can be defined as:
a. the total spending by all consumers, business firms, government agencies, and foreigners in the United States.
b. the total amounts that all consumers, business firms, government agencies, and foreigners wish to spend on all final goods and services at various price levels.
c. the total spending by consumers, business firms, and government agencies in one year.
d. the total spending by consumers, business firms, and government agencies on final goods and services.
b. the total amounts that all consumers, business firms, government agencies, and foreigners wish to spend on all final goods and services at various price levels.
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What is measured on the vertical axis of the aggregate demand graph?
A) unemployment B) nominal income C) the price level D) real GDP per year
Suppose water rates in Podunk rise by 100%. The water consumption in Podunk will tend to
A) remain unchanged, because water is a necessity of life. B) decrease substantially overnight. C) decrease more substantially over time, as residents discover substitutes for water. D) decrease, and therefore lead to a lower price of water.