In practice, one of the principal problems with aggregate demand management is that
A) changes in aggregate demand do not affect output.
B) changes in aggregate demand cannot reduce unemployment.
C) changes in aggregate demand are highly inflationary.
D) stabilization policies could increase aggregate demand too much and at the wrong times.
D
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Fill in the blank: Your authors claim ________ has been the rule rather than the exception through almost all of human history
A) price stability B) poverty C) disinflation D) wealth
Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D1 and S1 (point A). If there is a surplus of motorcycles how will the equilibrium point change?
A) The equilibrium point will move from A to E. B) The equilibrium point will move from A to B. C) There will be no change in the equilibrium point. D) The equilibrium point will move from A to C.