There are several reasons why the aggregate demand curve is downward sloping. Which of the following CORRECTLY describes one of these explanations?
A) A rise in the price level raises the purchasing power wealth and increases desired consumption.
B) A rise in the price level raises interest rates and increases investment spending.
C) A fall in the price level, holding foreign prices and the exchange rate constant, increases net exports.
D) A rise in the price level lowers the interest rate and increases investment spending.
C
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Suppose that workers develop a greater taste for leisure, and thus require more time away from work. What is likely to happen to wages and the quantity of labor hired?
A) wages decrease, quantity of labor hired increases B) wages increase, quantity of labor hired decreases C) wages increase, quantity of labor hired increases D) wages decrease, quantity of labor hired decreases
Which of the following is a typical attribute of a socialist country?
A. Taxes are very high, particularly on the wealthy classes. B. Cradle-to-grave security for its citizens. C. A large-scale redistribution of income program from the wealthy and well-to-do to the middle class, working, class and the poor. D. All of the choices are attributes of a socialist country.