Answer to Question #322820 in Macroeconomics for Conia

Question

1. The paradox of thrift states that a downward shift in the saving schedule will lower the equilibrium level of national income.

True False

2. If investment demand is given, the slope of aggregate demand is determined by the consumption function.

True False

3. An economy's aggregate demand curve shows that other things are constant:

A. when the general price level changes, there is a shift in the curve.

B. there is some price level that generates an aggregate equilibrium in the economy. 

C. any reduction in the general price level causes a reduction in GNP.

D. None of the above.

4. In a simple economy with the government but no foreign trade, aggregate income is in equilibrium when:

A. tax revenues equal government spending. 

B. planned savings equals planned investment. 

C. planned leakages equal planned injections. 

D. actual leakages equal actual injections.

Answer 1

1.False

2.False

3.None of the above.

4. planned savings equals planned investment.