The Model of Aggregate Demand and Aggregate Supply

question 12

Multiple Choice

The model of aggregate demand and aggregate supply

• A)is different from the model of supply and demand for a particular market,in that we cannot focus on the substitution of resources between markets to explain aggregate relationships.
• B)is different from the model of supply and demand for a particular market,in that we have to separate real and nominal variables in the aggregate model.
• C)is a straightforward extension of the model of supply and demand for a particular market,in which substitution of resources between markets is highlighted.
• D)is a straightforward extension of the model of supply and demand for a particular market,in which the interaction between real and nominal variables is highlighted.

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Definitions:

Elastic Demand

A condition where the quantity demanded of a good or service changes significantly as its price changes.

Students

Individuals who are engaged in the pursuit of education, typically at schools, colleges, or universities.

Movie Theater

A venue equipped for projecting films for public entertainment, where audiences can watch movies on a large screen.

Highly Profitable

Highly profitable describes businesses or investments that generate earnings significantly above the average for their sector or the market as a whole.