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Question: Describe what the effect on aggregate demand would be, other things being equal, if
a. exports increase.
b. both imports and exports decrease.
c. consumption decreases.
d. investment increases.
e. investment decreases and government purchases increase.
f. the price level increases.
g. the price level decreases.
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Explain the differecnce between fixed-procuction technology and variable-production technology. Should the government set a goal of reducing the marginal social cost of pollution to zero in industries with fixed-production technology
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Which of the following is a central proposition of orthodox Keynesianism - output is constrained by aggregate supply
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Assume consumers expect a recession to begin in the next few months. They might react by trying to save more in case they are laid-off or have to work reduced hours
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In addition to depending on disposable income, suppose household consumption were also a function of the interest rate. In particular, assume that households consume more (i.e., save less) when the interest rate falls. Assume prices are fixed in t..
Before 1970, many countries were on the gold standard. Since that time, floating exchange regimes have dominated the global economy. Select a country which now has a floating or a pegged exchange rate.
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