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-The Table Above Gives Data for the Nation of Mosh

Question 12

Multiple Choice

 Consumption  Real GDP, Y (trillions of  Government  (trillions of  Investment, I  (trillions of  expenditure, G (trillions of  Exports, X (trillions of  Imports, M (trillions of 2005 dollars)   2005 dollars)   2005 dollars)   2005 dollars)   2005 dollars)  2005 dollars)  01.002110.5011.752110.7522.502111.0033.252111.2544.002111.5054.752111.7565.502112.0076.252112.2587.002112.5097.752112.75108.502113.00\begin{array} { c c c c c c } \begin{array} { c } \text { Consumption } \\\text { Real GDP, } Y \\\text { (trillions of }\end{array} & \begin{array} { c } \text { Government } \\\text { (trillions of }\end{array} & \begin{array} { c } \text { Investment, I } \\\text { (trillions of }\end{array} & \begin{array} { c } \text { expenditure, } G \\\text { (trillions of }\end{array} & \begin{array} { c } \text { Exports, } X \\\text { (trillions of }\end{array} & \begin{array} { c } \text { Imports, } M \\\text { (trillions of }\end{array} \\2005 \text { dollars) } & \text { 2005 dollars) } & \text { 2005 dollars) } & \text { 2005 dollars) } & \text { 2005 dollars) } & 2005 \text { dollars) } \\\hline 0 & 1.00 & 2 & 1 & 1 & 0.50 \\1 & 1.75 & 2 & 1 & 1 & 0.75 \\2 & 2.50 & 2 & 1 & 1 & 1.00 \\3 & 3.25 & 2 & 1 & 1 & 1.25 \\4 & 4.00 & 2 & 1 & 1 & 1.50 \\5 & 4.75 & 2 & 1 & 1 & 1.75 \\6 & 5.50 & 2 & 1 & 1 & 2.00 \\7 & 6.25 & 2 & 1 & 1 & 2.25 \\8 & 7.00 & 2 & 1 & 1 & 2.50 \\9 & 7.75 & 2 & 1 & 1 & 2.75 \\10 & 8.50 & 2 & 1 & 1 & 3.00\end{array}
-The table above gives data for the nation of Mosh.If real GDP is $6 trillion, then


A) firms decrease production because inventories exceed their target levels.
B) firms increase production because inventories are less than their target levels.
C) the economy has reached equilibrium and no change in production will occur.
D) firms increase production because inventories exceed their target levels.
E) we need more information to determine whether firms increase, decrease, or do not change their production.

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