Figure 21-10 -Refer to Figure 21-10. When Comparing Bundle B to Bundle

question 187

Multiple Choice

Figure 21-10
-Refer to Figure 21-10. When comparing bundle B to bundle C, the consumer

• A)prefers bundle B because it contains more donuts.
• B)is indifferent between the two bundles.
• C)prefers bundle C because it contains more cake.
• D)In order to compare bundle B to bundle C, we must know the prices of cake and donuts.

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Definitions:

Aggregate Demand

Aggregate demand represents the total demand for goods and services within an economy at a given overall price level and time period.

John Maynard Keynes

A British scholar in economics whose contributions had a profound impact on how macroeconomics is understood and applied by governments.

Unemployment Rate

A measure indicating the proportion of the workforce that is not employed but is actively seeking work and willing to work.

Recessionary Gap

The difference between the actual output of an economy and the output it would produce if it were at full employment, indicating underperformance.