In the Simple Macro Model That Is Considered in Chapters

question 43

Multiple Choice

In the simple macro model that is considered in Chapters 21 and 22 of the textbook,

• A)the economy is always in equilibrium.
• B)there is no government or foreign trade.
• C)the price level is determined within the model.
• D)there are no supply-side influences on national income.
• E)the simple multiplier is always equal to 1.

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Definitions:

Inputs

Resources used in the production process, including labor, capital, materials, and energy.

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a given price over a specified period.

Total Revenue

The overall income generated by a business from its sale of goods or services, calculated as the price per unit times the number of units sold.

Elasticity Of Supply

A measure of how much the quantity supplied of a good changes in response to a change in price.