The Simple Macro Model That Is Considered in Chapters 21

question 87

Multiple Choice

The simple macro model that is considered in Chapters 21 and 22 of the textbook is characterized by

• A)a given (constant)price level,and equilibrium national income determined by demand and supply.
• B)an endogenous price level,and national income that is solely demand determined.
• C)a given (constant)price level,and national income that is solely demand determined.
• D)an endogenous price level,and equilibrium national income determined by demand and supply.
• E)an open economy with an endogenous exchange rate.

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Definitions:

Car Loan

A financial loan specifically used to purchase a car, typically secured by the car itself as collateral.

Periodic Rate

The interest rate applied to a financial loan or savings account that is compounded at regular intervals over a period of time.

Effective Rate

The actual interest rate an individual pays on a loan or earns on an investment, after compounding and other charges are factored in.

Credit Card

A plastic card issued by a bank or financial institution allowing the holder to purchase goods or services on credit.