"Input-Output" Macroeconomics Stresses That a Change in Nominal Aggregate Demand

question 2

Multiple Choice

"Input-output" macroeconomics stresses that a change in nominal aggregate demand ________ produces an equal-proportional change in every firm's marginal cost,so that firms should consider indexing their price to nominal aggregate demand a very ________ pricing strategy.

• A)need not,safe
• B)need not,risky
• C)must,safe
• D)must,risky

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Definitions:

NDP

Net Domestic Product, an economic indicator measuring the total value of all goods and services produced within a country in a year, minus depreciation.

National Income

The total monetary value of all goods and services produced by a country's economy over a specific time period, excluding income earned abroad.

GDP

Gross Domestic Product, abbreviated as GDP, embodies the total market and monetary worth of all products and services that are finalized within a country's borders throughout a defined period.

Depreciation

An accounting method of allocating the cost of a tangible or physical asset over its useful life or life expectancy.