In the above figure, if the economy is at point a, an increase in ________ will move the economy to ________
A) real wealth from the fall in the price level; point b
B) real wealth from the fall in the price level; point c
C) expected future income; point c
D) expected future income; point d
B
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An increase in the price level will
a. increase the quantity of aggregate expenditure, shown as an upward movement along the existing aggregate expenditure curve b. decrease the quantity of aggregate expenditure, shown as an upward movement along the existing aggregate expenditure curve c. cause an upward shift in the aggregate expenditure curve d. cause a downward shift in the aggregate expenditure curve e. have no effect on the aggregate expenditure curve
Which of the following would lead to an increase in the demand for rental apartments in your area?
a. a reduction in the rental price of apartments b. a sharp increase in the number of out-of-town students attending the local college c. an increase in the cost of the materials used to construct apartment units. d. an increase in unemployment and reduction in the income of people in your area