If firms find that consumers are purchasing more than expected, which of the following would you expect?
A) The economy will adjust to macroeconomic equilibrium as inventories fall, and production and employment fall.
B) Aggregate expenditure will likely be greater than GDP.
C) Aggregate expenditure will likely be less than GDP.
D) The economy will adjust to macroeconomic equilibrium as inventories rise, and production and employment fall.
B
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If households and firms decide to hold less of their money in checking account deposits and more in currency, then initially, the money supply
A) will decrease. B) will not change. C) will increase. D) may increase or decrease.
What is the difference between the short run and the long run as economists define the two?
What will be an ideal response?
The socially optimal quantity of a public good is reached when the
a. total positive externality is maximized b. total negative externality equals total positive externality c. total negative externality equals the tax revenue d. total negative externality is minimized e. total tax revenue is minimized
In a simple economy (no government), the vertical distance between the consumption function and the expenditure schedule measures
a. undesired inventory depletion. b. planned investment c. undesired investment. d. unintended investment.