Identify four changes in the economy that would cause the aggregate demand curve to decrease (shift to the left)
The aggregate demand curve might be shifted to the left (a decrease) because of a decrease in consumption spending because of higher income taxes, a fall in consumer confidence or a reduced stock market wealth. Aggregate demand could also shift left if investment decreased due to higher real interest rates or a pessimistic economic outlook. Aggregate demand could also be decreased through a reduction in government purchases, or transfer payments. If net exports fell, this would also decrease aggregate demand.
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Which of the following is true of the expenditure-based method of national accounting?
A) It does not track the purchase of goods and services by the government. B) It only tracks the purchase of goods and services by the government. C) It tracks the purchase of investment goods by firms and households. D) It does not track the purchase of services by households.
Much of the research on the minimum efficient scale suggests that for many firms, economies of scale are:
A) relatively modest. B) nonexistent. C) substantial. D) heavily dependent on the minimum efficient scale of the firm's production process.