Multiple Choice
Use the following to answer questions .
Exhibit: Aggregate Expenditures (AE) in a Simplified Economy
-(Exhibit: Aggregate Expenditures (AE) in a Simplified Economy) Consider a simple economy that is made up of only two sectors, households and firms, and that investment is autonomous. Further, disposable personal income = real GDP. Suppose that actual real GDP in this economy is $500 billion in a particular period. We would expect to see
A) unintended reductions in inventory, planned investment will exceed actual investment.
B) unintended reductions in inventory, planned investment will be less than actual investment.
C) unintended increases in inventory, planned investment will exceed actual investment.
D) unintended increases in inventory, planned investment will be less than actual investment.
Correct Answer:
Verified
Correct Answer:
Verified
Q15: Use the following to answer questions .<br>Exhibit:
Q16: A change in aggregate demand causes a
Q17: Use the following to answer questions .<br>Exhibit:
Q18: Consider a simple aggregate expenditure model where
Q19: The smaller the marginal propensity to consume,<br>A)
Q21: Let Y = real GDP and Y<sub>d</sub>
Q22: An upward shift in the consumption function
Q23: The notion that a change in autonomous
Q24: Use the following to answer questions .<br>Exhibit:
Q25: A change in autonomous aggregate expenditures will