13. The components of aggregate demand are a) Consumption, government spending,

Question

13. The components of aggregate demand are a) Consumption, government spending, imports, and investment. b) Consumption, exports, imports, and government spending c) Exports, imports, investment, and disposable income d) Consumption, interest, government spending, and net exports e) None of the above 14. When the price level in the economy increases, potential GDP will neither increase nor decrease, ceteris paribus a) True b) False 15. Money that has value apart from its use as money is called a) fiat money b) currency c) cvertible paper money d) cmodity money. e) gold standard money 16. A commercial bank increases the money supply by making loans. a) True b) False

Explanation / Answer

13.d . Y = C + I + G + NX for an open economy where C stands for consumption expenditure, G for government expenditure, I for investment and NX for net exports i.e. exports minus import.

14. a. The potential output shows the level of output which can be attained by an economy when all its resources are fully employed. It is independent of price.

15. Commodity. Any commodity that is used as money has intrinsic value along with extrinsic value. Like oil, sugar etc

16. True. A commercial bank can give loan directly to consumer or businessmen. In this money is created via money multiplier.

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.