A model is defined as a:
a. description of all variables affecting a situation.
b. positive analysis of all variables affecting an event.
c. simplified description of reality to understand and predict an economic event.
d. prediction based on historical evidence.
c
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An increase in the price of pineapples will result in
A) a decrease in the demand for pineapples. B) an increase in the supply of pineapples. C) a larger quantity of pineapples supplied. D) a smaller quantity of pineapples supplied.
Expansionary fiscal policy should be used if:
A) aggregate demand-aggregate supply equilibrium is below potential output. B) aggregate demand-aggregate supply equilibrium is above potential output. C) aggregate demand-aggregate supply equilibrium is equal to potential output. D) none of the above.