Multiple Choice
Consider a simple macro model with a constant price level and demand- determined output. Suppose desired aggregate expenditures are less than the current level of national income. The vertical distance between the AE curve and the 45- degree line represents
A) the amount by which desired expenditures exceeds output.
B) desired accumulation of inventories.
C) the output gap.
D) the amount by which output exceeds desired expenditures.
E) desired decumulation of inventories.
Correct Answer:
Verified
Correct Answer:
Verified
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