Question

1. The aggregate demand curve

Group of answer choices

a. is derived from equilibrium conditions in the labor and money markets

b. plots the interest rate as a function of output

c. is the sum of an economy’s individual demand curves

d. gives the equilibrium level of GDP corresponding to a given price level

e. represents the relationship between prices and quantities of all goods produced in an economy

2. Everything else constant, who is least likely to lose from unexpected inflation?

Group of answer choices

a. a retired person whose pension payments are fixed dollars

b. a consumer who spends extra time shopping for the lowest prices

c. a homeowner scheduled to make fixed nominal mortgage payments

d. a bank scheduled to receive fixed nominal mortgage payments

e. a person with a large amount of money deposited in a savings account

3. If there is an increase in the price of oil and the Federal Reserve wants to maintain output stability, it should

Group of answer choices

a. buy bonds

b. more than one answer is correct.

c. increase taxes

d. decrease taxes

e. sell bonds

4. If an economy is producing on its short-run aggregate supply curve but to the right of its aggregate demand curve then

Group of answer choices

a. the price level is too low to support that level of production

b. inventory levels must be decreasing and output will begin to increase

c. inventory levels must be increasing and output will begin to decrease

d. the price level is too high to support that level of production

PLEASE ANSWER THE 4 MULTIPLE CHOICES LIKE CHEGG SUGGETS, I WILL GIVE THUMBS UP.

Answer 1

Answer
1.is the sum of an economy’s individual demand curves
The aggregate demand is the representation of all the demand curves from all the industries. The Industry demand curve is the summation individual demand curves, thus the aggregate demand is the summation of all the indidvidual demand curve of the economy as a whole

2 a retired person whose pension payments are fixed dollars
Fixed nominal rates are not affected by inflation rates, but fixed sum f money is. The fixed sum of pension will devalue with an unexpected inflation

3 a buy bonds
Increaase in the pice of oild is effectively an inflation in the whole economy, buying bonds will reduce the money supply and make the home currency stronger.

4 inventory levels must be decreasing and output will begin to increase

This means that the economy is operating beyond its poetntial output, this will deplete inventories and increase output.

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