The pre-Keynesian or classical economic theory predicted that in the long-run the economy would experience:
a. long periods of high unemployment.
b. rising rates of inflation.
c. only temporary periods of high unemployment.
d. idle factors of production.
QUESTION 2Fixed investment refers to investment in stocks, bonds, and improvements to land.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3To illustrate the classical argument that supply creates its own demand, the aggregate supply curve should be drawn:
a. downward-sloping.
b. upward-sloping.
c. horizontal.
d. vertical.
QUESTION 4Intermediate goods are included and final goods are not included in calculating gross domestic product.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5The aggregate supply curve reflects the relationship between the price:
a. of a particular good and the quantity supplied by all firms producing that good.
b. of a particular good and the quantity supplied by the aggregate economy.
c. level and the quantity supplied of all goods in the economy.
d. level and the quantity of all goods purchased in the economy.