Aggregate Demand Grows Because

question 115

Multiple Choice

Aggregate demand grows because

• A)patent laws protect and stimulate new inventions.
• B)there is more machinery and technology improves.
• C)the government increases its spending, a growing population increases consumer spending, and the Fed increases the money supply.
• D)All of the above are correct.

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Definitions:

Pareto Optimal

An allocation of resources from which it is impossible to reallocate to make any one individual better off without making at least one individual worse off.

Utility Function

A mathematical representation used in economics to model the satisfaction or happiness a consumer derives from consuming goods and services.

Edgeworth Box

A diagram used in microeconomics to show the distribution of resources and the optimality of trade-offs between two agents in an economy.

Pareto Efficient

A condition where resources are distributed in such a manner that improving the situation of one person necessitates the detriment of another.