Multiple Choice
Assume an economy is in equilibrium at an output level of $1,600 billion. If government purchases increase by $200 billion, then at the output level of $1,600 billion, there is
A) an unplanned increase in inventories.
B) an unplanned inventory change of zero.
C) an unplanned decrease in inventories.
D) either an unplanned increase or decrease in inventories depending on the value of the MPC.
Correct Answer:
Verified
Correct Answer:
Verified
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