True or false? The aggregate demand curve is the sum of individual demand curves in the economy.
Question:
True or false? The aggregate demand curve is the sum of individual demand curves in the economy.
Demand Curve:
The demand curve graphically represents the relationship between the quantity demanded of a good or service and its price in the market. The relationship between the two variables is inverse as established by the law of demand that yields a negative slope for the demand curve.
Answer and Explanation: 1
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View this answer- The statement is true.
The aggregate demand curve represents the relationship between the demand for goods and services and the general price level...
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Understanding Aggregate Supply & Demand
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Chapter 60 / Lesson 2
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In economics, aggregate supply and demand are used to determine the production and purchasing power of the economy. Learn about aggregate supply and aggregate demand, and explore the details of the AS/AD model devised by John Maynard Keynes.
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- a) The Market Demand Curve is the same an Individual Demand Curve? True or False. Discuss b) Does the market demand curve always slope downward to the right? If your answer is yes, discuss. If your an
- True or false? Microeconomic equilibrium happens when the aggregate supply and aggregate demand curves intersect.
- Since the aggregate supply curve is horizontal, aggregate demand will determine the equilibrium level of real GDP. True or false.
- True or False: The flatter the demand curve passing through a given point, the less elastic the demand curve at that point.
- True or false? If the demand curve for a good is a steep, straight line, then the demand for the good is inelastic at every point along that demand curve.
- True or false? A pure monopolistic demand curve is the industry demand curve.
- True or false? A monopolistic firm's demand curve is less elastic than a purely competitive firm's demand curve.
- True or false? Along a single demand curve, demand elasticity decreases as you move down the curve (to lower prices).
- True or false? When the long-run aggregate supply curve decreases, a corresponding increase would take place with aggregate demand.
- The flatter the demand curve passing through a given point, the less elastic the demand curve at that point. a. True b. False
- Answer true or false: In the Keynesian view, a leftward shift in aggregate demand does not lead to falling prices since the short-run aggregate supply curve is vertical.
- During the Great Recession, the aggregate expenditure curve shifted downward and the short-run aggregate supply curve and the aggregate demand curve shifted to the left. True or False?
- 1. True or False? Say's Law states that a general glut of goods in the economy will occur quite often. 2. At the intersection of the short run aggregate supply curve (SAS), the aggregate demand curve
- The market demand curve is the vertical summation of the demand curves of all the individuals in the market. a. true. b. false.
- True or false? A demand curve that is flatter (has a less steep slope) is relatively more elastic than a demand curve that has a steeper slope.
- In the Keynesian view, a leftward shift in Aggregate Demand does not lead to falling prices since the short run Aggregate Supply curve is vertical. True False
- State true or false: The equilibrium price level and the equilibrium level of real GDP occur at the intersection of the aggregate demand curve and the aggregate supply curve.
- If the market demand curve for a good is a downward-sloping line, its price elasticity is constant. a. True. b. False.
- True or false? The model of aggregate demand and aggregate supply is used by most economists to analyze short-run fluctuations.
- If the aggregate supply curve is vertical, then shifts in aggregate demand will not change aggregate output. (a) True (b) False
- True or false? The economy-wide demand curve for input A will be more elastic the more elastic consumer demand is for products that use input A.
- True or false? Marginal utility analysis is unrelated to the demand curve.
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- True or false? The long-run aggregate supply curve is vertical because economic forces do not affect long-run aggregate supply.
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- The aggregate demand curve slopes down because of the inverse relationship between price level and real output (GDP). True or false?
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- True or false? Demand curves of individuals obey the law of demand but market demand curves do not.
- The (Keynesian) Income-Expenditure model shows Aggregate Supply (AS) and Aggregate Demand (AD) curves that always intersect at the point where output (Y) is at full employment (YF). True/False?
- The socially efficient quantity is found where the demand curve intersects the marginal cost curve. a. True b. False
- Consumer surplus is the area above the demand curve and below the equilibrium price. True or False.
- True or false? The value of the price elasticity of demand is not equal to the slope of the demand curve.
- The aggregate demand curve shows a positive relationship between price level and equilibrium. a. True b. False
- True or false? Market equilibrium occurs at the intersection of the supply and demand curves.
- True or false? The market demand curve for labor is found by adding the supply curves for labor of individual firms.
- The market demand curve is determined by adding the individual demand curves in a vertical direction. True or False?
- True or false? An oligopolist does not face a downward-sloping demand curve.
- True or false? The elasticity of demand is constant along a linear demand curve.
- The intersection of aggregate supply and aggregate demand determines the equilibrium price level and equilibrium real output. a. True. b. False.
- True or false? A monopolistic firm's demand curve is always inelastic.
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- An increase in the price level shifts the aggregate demand curve to the left. True False
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- The value of the price elasticity of demand is equal to the slope of the demand curve. True or false?
- True or false? In a perfectly competitive market, each firm faces a perfectly elastic demand curve.
- True or False: When a perfectly competitive firm's demand curve lies above its average total cost curve, the firm incurs an economic loss at that level of output.
- Free markets create maximum economic value at the output at which supply and demand curves intersect. A. True B. False
- True or false? Perfectly inelastic demand occurs when the demand curve is horizontal.
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- True or false? Consumer surplus is illustrated as the area below a demand curve but above market price.
- True or false? A change in expectations could shift either the demand curve or the supply curve.
- True or False: Both the supply and demand curves depend on expectations but the supply curve depends on the expectations of the buyer and the demand curve depends on the expectations of the seller.
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- True or false? Contractionary fiscal policy seeks to shift the aggregate demand curve to the right.
- True or False: If labor and capital are complements in production, then the long-run labor demand curve is less elastic than the short-run labor demand curve. Explain your answer.
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- Answer true or false: The monopolistic competitive firm faces a perfectly elastic demand curve.
- When demand is perfectly inelastic with respect to price, the demand curve is horizontal. True or false?
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- True or false? A competitive firm's supply curve is identical to its marginal cost curve.
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- A horizontal aggregate supply curve indicates that equilibrium real GDP is determined by aggregate supply. True or False?
- Price-discriminating, profit-maximizing monopolists charge higher prices to buyers who have more elastic demand curves. a. True b. False
- Marginal revenue is equal to price if the demand curve is horizontal. a. True. b. False.
- The long-run aggregate supply curve is vertical. True or false?
- True or False: The equilibrium price is represented by the point where a product's supply and demand curves intersect.
- True or false? A rightward shift in the supply curve, assuming no change in the demand curve, will increase the price and decrease the quantity demanded.
- True or false? A monopolist produces on the inelastic portion of its demand curve.
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- When the demand curve is a downward-sloping straight line (linear), marginal revenue will be greater than MC at all output levels. A) True B) False
- Determine whether the statement is true or false. The marginal revenue curve for a competitive firm is its demand curve.
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- The long-run aggregate supply curve assumes that nominal wages are fixed. Is the statement true or false?
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- A perfectly elastic demand curve graphs as a horizontal straight line. a. True. b. False.
- True or false? A change in the price of inputs could shift either the demand curve or the supply curve.
- Stagflation occurs when the aggregate demand (AD) curve shifts out on the upward sloping portion of the short-run aggregate supply (SAS) curve. True or false?
- Stagflation occurs when the aggregate demand (AD) curve shifts out on the upward sloping portion of the short-run aggregate supply (SAS) curve. (a) True (b) False.
- True or false? A competitive firm faces a downward-sloping demand curve for its product.
- State True or False and justify your answer: A given increase in the money supply is more effective at shifting the aggregate demand curve the more interest rate responsive (elastic) is the money demand curve.
- 1. Consumer and producer surplus must always be equal. a. True b. False 2. The marginal cost curve is always below the average cost curve. a. True b. False
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