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Questions and Answers
What does the aggregate demand curve illustrate in macroeconomics?
What does the aggregate demand curve illustrate in macroeconomics?
- The relationship between the price level and the quantity of real GDP demanded by households, firms, and the government (correct)
- The relationship between the interest rate and investment spending
- The relationship between inflation and unemployment
- The relationship between the exchange rate and net exports
What causes a movement along the aggregate supply curve in macroeconomics?
What causes a movement along the aggregate supply curve in macroeconomics?
- Changes in technology
- Changes in consumer confidence
- Changes in the price level (correct)
- Changes in government spending
What is the impact of an increase in government spending on the aggregate demand curve?
What is the impact of an increase in government spending on the aggregate demand curve?
- Shifts the aggregate demand curve to the left
- Leads to a change in the equilibrium price level
- Shifts the aggregate demand curve to the right (correct)
- Causes movement along the aggregate supply curve
In a free market economy, who primarily determines the allocation of resources?
In a free market economy, who primarily determines the allocation of resources?
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What is a characteristic of prices in a free market economy?
What is a characteristic of prices in a free market economy?
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How does competition typically function in a free market economy?
How does competition typically function in a free market economy?
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