Without the government or the foreign sector in the income-expenditure model, planned aggregate expenditure equals
A. consumption plus inventory adjustment.
B. consumption plus planned investment.
C. consumption plus actual investment.
D. consumption minus planned investment.
Answer: B
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Compared to consumption spending, investment historically has tended to be
A) stagnant. B) more variable. C) more stable. D) greater.
Refer to the table above. Suppose that the only variable input that the firm uses is labor. What is the wage paid to a worker in the firm?
A) $1 B) $5 C) $10 D) $15
All of the following represent government spending as a part of aggregate demand except for:
A. Flood control. B. National parks. C. Police and fire protection. D. Social Security checks
Frictional unemployment occurs when
A. workers go back to school. B. employees file grievances and are fired. C. workers take time off to care for parents or children. D. workers move from one job into another.