In the aggregate expenditures model, equilibrium occurs if:
A. aggregate expenditures (AE) are greater than GDP.
B. aggregate expenditures (AE) are less than GDP.
C. there is no unplanned inventory depletion or accumulation.
D. consumption equals investment.
Answer: C
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If the government conducts a survey asking it citizens how much they value having potholes filled in, we can expect
a. an accurate evaluation of the work. b. citizens to understate the value of the work. c. citizens to exaggerate the value of the work. d. most citizens to refuse to answer.
In the United States, the wage premium for college education has been
a. decreasing since 1980. b. increasing since 1980. c. higher for males. d. decreasing since 1990.
When the IMF provides loans to developing countries, it often requires these countries to adopt:
A. a contractionary fiscal policy and an expansionary monetary policy. B. contractionary monetary and fiscal policies. C. expansionary monetary and fiscal policies. D. a contractionary monetary policy and an expansionary fiscal policy.
Within a market economy, some industries may be declining while other industries may be expanding. This indicates that:
A. producers are not maximizing profits. B. productive resources are being reallocated. C. factors of production are scarce. D. incomes are declining.