Solved

-The Above Figure Shows the AE Curve and 45° Line

Question 279

Essay

-The above figure shows the AE curve and 45° line for an economy. a) If real GDP equals $8 trillion, how do firms' inventories compare to their planned inventories? b) If real GDP equals $16 trillion, how do firms' inventories compare to their planned inventories? c) What is the equilibrium level of expenditure? Why is this amount the equilibrium?
-The above figure shows the AE curve and 45° line for an economy.
a) If real GDP equals $8 trillion, how do firms' inventories compare to their planned inventories?
b) If real GDP equals $16 trillion, how do firms' inventories compare to their planned inventories?
c) What is the equilibrium level of expenditure? Why is this amount the equilibrium?

Correct Answer:

verifed

Verified

a) If real GDP equals $8 trillion, aggre...

View Answer

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q274: As real disposable income increases, consumption expenditure

Q275: If the MPC increases from 0.75 to

Q276: In a simple economy in which prices

Q277: When autonomous expenditure changes, the horizontal distance

Q278: What is the difference between movements along

Q280: The MPC and MPS sum to<br>A) 1.<br>B)

Q281: In the short run, the multiplier typically

Q282: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB8586/.jpg" alt=" -In the above

Q283: Imports and income taxes make the multiplier

Q284: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB8586/.jpg" alt=" -In the figure