Author Question: Which of the following is true of Simple Keynesian model? a. Price level increases with an increase ... (Read 27 times)

audragclark · **on:** Jun 30, 2018

Which of the following is true of Simple Keynesian model?
a. Price level increases with an increase in aggregate demand.
b. The aggregate supply curve is assumed to be perfectly inelastic.
c. The aggregate demand curve is assumed to be perfectly elastic.
d. Price level is solely determined by the aggregate demand curve.
e. Changes in aggregate demand determines equilibrium real GDP.

Question 2

The price of stadium seats at a baseball game increases from 20 to 30 and ticket sales fall from 45,000 per game to 35,000 per game. If other things remained constant, then it appears that the price elasticity of demand is:
a. elastic.
b. inelastic.
c. unit elastic.
d. unit inelastic.
e. equal to zero.