Some Economists Argue That the Increases in Aggregate Demand for Output

question 23

Multiple Choice

Some economists argue that the increases in aggregate demand for output spurred by wartime spending,complemented by the strong spending in the private sector,impacted the U.S.?economy by

• A) increasing production and employment.
• B) increasing employment and income.
• C) increasing income, thus fueling additional spending.
• D) contributing to all of the above.

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Definitions:

Short-Run Equilibrium

A state in which supply and demand are balanced at a particular price level within a short timeframe, before any significant external changes can occur.

Total Cost

The entire cost of production including both fixed and variable costs.

Marginal Cost

The upsurge in total financial outlay occasioned by the production of one supplementary unit of a product or service.

Marginal Revenue

The additional revenue that a firm gains when it sells one more unit of a product.