"An increase in Mexican income decreases aggregate demand in the United States." Is the preceding statement correct or incorrect? Briefly explain your answer
What will be an ideal response?
The statement is incorrect. An increase in Mexican income means that Mexican citizens buy more goods and services exported from the United States. The increase in U.S. exports increases U.S. aggregate demand.
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For a perfectly competitive syrup producer whose average total cost curve does not change, an economic profit could turn into an economic loss if the
A) market demand for syrup decreases. B) marginal cost curve shifts downward. C) market demand for syrup does not change. D) market demand for syrup increases. E) price of syrup rises.
The Keynesian aggregate supply schedule slopes upward because of
a. unstable expectations. b. inflexible wages and prices. c. changes in technology. d. differences between actual and expected price levels.