A bunch of elementary school kids sit down at a long lunch table. For several minutes, everyone trades food, but then the table becomes quiet as they begin to eat. What happened?
What will be an ideal response?
As long as there are additional mutually beneficial trades, individuals will continue to negotiate and trade. Once all the gains from trade have been exhausted, trading ends.
You might also like to view...
In the four-part diagram used to construct the IS curve, a decrease in the interest rate causes
A) an increase in Ap and induced saving but does not shift the IS curve. B) an increase in Ap and induced saving and shifts the IS curve to the right. C) a decrease in Ap, an increase in induced saving, and shifts the IS curve to the right. D) a decrease in Ap and a decrease in induced saving, but does not shift the IS curve.
The equilibrium level of GDP is the level at which
a. aggregate demand exceeds output. b. aggregate demand equals output. c. aggregate demand is less than output. d. inventories are being depleted to meet demand.