Question

1.

In the neo-classical model, the aggregate supply curve has three ranges depending on how far the economy is from full employment.

a. True

b. False

2.  

Suppose you are given the following fixed-price Keynesian model:

C = 480 + 0.9Yd

I = 200

G = 100

X = 200

M = 100 + 0.1Yd

T = 100.

What is the equilibrium level of GDP?

	a.	1180
	b.	5500
	c.	4400
	d.	4000
	e.	3200

3.  

In the question above, at equilibrium the level of consumption spending is $3990

a. True

b. False

4.

The aggregate demand curve can be derived by looking at different levels of output along the production function.

True

False

Answer 1