Identify the correct statement.
a. Aggregate demand alone determines equilibrium price and output.
b. Aggregate supply alone determines equilibrium price and output.
c. Aggregate demand and aggregate supply determine equilibrium price and output.
d. Aggregate demand shows the positive relationship between price level and real GDP.
e. Aggregate supply shows the negative relationship between price level and real GDP.
Question 2
Normative statements are:
a. prescriptive, making claims about how the world ought to be.
b. descriptive, making claims about how the world is.
c. optimistic, putting the best possible interpretation on things.
d. statements that establish production goals for the economy.
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