12. The model of aggregate demand and aggregate supply (Points : 2) is different

Question

12. The model of aggregate demand and aggregate supply (Points : 2)        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.
       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.
       is a straightforward extension of the model of supply and demand for a particular market, in which substitution of resources between markets is highlighted.
       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.

Question 13. 13. Other things the same, during recessions taxes tend to (Points : 2)        rise. The rise in taxes stimulates aggregate demand.
       rise. The rise in taxes contracts aggregate demand.
       fall. The fall in taxes stimulates aggregate demand.
       fall. The fall in taxes contracts aggregate demand.

Explanation / Answer

13. fall. The fall in taxes stimulates aggregate demand.

14. increases, interest rates increase, and investment decreases.

15. increase government expenditures or increase the money supply

16. a decline in residential construction and a decrease in lending

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