Suppose actual investment is greater than planned investment at the current level of output in a given year. Given this information, we know that
A. saving must be equal to planned investment in that year.
B. firms' stock of inventories must have increased unexpectedly in that year.
C. saving must be less than planned investment in that year.
D. GDP will tend to increase over time.
Answer: B
You might also like to view...
Which of the following statements is correct?
i. The demand curve shows the maximum price people are willing to pay for a given quantity of the good. ii. The maximum price a consumer is willing to pay for an additional unit is the marginal benefit of that unit. iii. Value is what a consumer receives and price is what a consumer pays. A) i only B) ii only C) iii only D) i and iii E) i, ii, and iii
Governments can increase the consumption of a product that helps in reducing negative externalities by
A) subsidizing the purchase of the product. B) taxing the consumption of the product. C) assigning property rights to the producer of the product. D) taxing the production of the product.
Analysis of the transmission mechanisms of monetary policy provides four basic lessons for a central bank's conduct of monetary policy. These lessons include the following
A) Rising interest rates indicate a tightening of monetary policy, whereas falling interest rates indicate an easing of monetary policy. B) Monetary policy can be highly effective in reviving a weak economy even if short-term interest rates are already near zero. C) Avoiding fluctuations in the level of unemployment is an important objective of monetary policy, thus providing a rationale for interest-rate stability as the primary long-run goal for monetary policy. D) Other asset prices beside those on short-term debt instruments do not contain important information about the stance of monetary policy because they are not important elements in various monetary policy transmission mechanisms.
If the marginal propensity to consume is 6/7, then the multiplier is 7
a. True b. False Indicate whether the statement is true or false