Induced expenditure is the portion of planned aggregate expenditure that: Questi

Question

Induced expenditure is the portion of planned aggregate expenditure that:

Question 2 options:

depends on output.

The decision about how much money to hold is an application of the:

Question 10 options:

cost-benefit principle.

The AS curve slopes upward because:

Question 22 options:

inflation is higher in goods-producing industries than service-producing industries.

A) equals aggregate output. B) equals planned spending. C) equals autonomous expenditure. D)

depends on output.

The decision about how much money to hold is an application of the:

Question 10 options:

A) scarcity principle. B) principle of comparative advantage. C) equilibrium principle. D)

cost-benefit principle.

The AS curve slopes upward because:

Question 22 options:

A) firms generally sell their products at preset prices. B) relaxing the assumptions of the Keynesian model allows us to develop a more realistic model where firms no longer care about prices. C) many firms raise their prices when aggregate demand has increased. D)

inflation is higher in goods-producing industries than service-producing industries.

Explanation / Answer

Question 1) The portion of planned aggregate expenditure that equals autonomous expenditure. (Option c)

Question 2) The decision about how much money to hold is an application of the equilibrium principle. (Option c)

Question 3) The AS curve slopes upward because many firms raise their prices when aggregate demand has increased. (Option c)

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