Over a Long Period of Time,perhaps Many Years,changes in Real

question 28

Multiple Choice

Over a long period of time,perhaps many years,changes in real GDP come primarily from

• A)upward shifts of the AS curve.
• B)upward shifts of the AE curve.
• C)rightward shifts of the AD curve.
• D)continuous increases in potential GDP.
• E)leftward shifts of the AD curve.

Recognize the effects of consumer confidence and expectations on spending.

Articulate the significance of the average propensity to consume and save.

Understand the influence of consumer income on spending categories.

Describe the principles of conspicuous consumption and the wealth effect.

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Definitions:

Complementary Goods

Products or services that are typically consumed together, where a decrease in the price of one leads to an increase in demand for the other.

Producer Surplus

The difference between the amount a producer is paid for a good versus the minimum amount they would be willing to accept.

Equilibrium

A state in which market supply and demand balance each other, leading to price stability for a particular good or service.

Efficiency

The optimum allocation of resources to achieve the best possible output or outcome with minimal waste or inefficiency.