You Read in the Paper That There Has Been a Significant

question 120

Multiple Choice

You read in the paper that there has been a significant increase in the consumer confidence index.Having taken an economics class,you predict that spending in the economy will ________ and aggregate demand will ________.

• A) decrease; increase
• B) decrease; decrease
• C) increase; be unaffected
• D) increase; decrease
• E) increase; increase

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Definitions:

Marginal Revenue

The increment in revenue resulting from the sale of an additional unit of output in a market.

Marginal Cost

The budget allocation for the production of an additional unit of a product or service.

Perfect Competition

A market structure characterized by many buyers and sellers, free entry and exit, and a homogeneous product, leading to no single entity having market power.

Marginal Unit

Refers to the additional or incremental unit of a good or service considered in analysis or decision-making.