If the level of real GDP is $14 trillion while aggregate planned expenditure is $15 trillion, then
A) inventories rise more than planned, leading firms to increase production.
B) real GDP increases and planned expenditure decreases reaching equilibrium in the middle.
C) aggregate planned expenditure decreases to reach the equilibrium of $14 trillion.
D) inventories fall more than planned, leading firms to increase production.
E) inventories rise more than planned, leading firms to cut production.
D
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Using the rule that focuses on the marginal approach to maximizing profits, a monopolist charges a price where the:
a. output sold is maximized. b. ATC curve is minimized. c. MR = MC. d. MR = 0.
Bananas and apples are substitutes. When the price of bananas falls, and a technological advance in apple production occurs at the same time:
A. the equilibrium price of apples rises and the equilibrium quantity of apples falls. B. the equilibrium price of apples rises and the equilibrium quantity of apples rises. C. the equilibrium price of apples rises and the equilibrium quantity of apples might rise or fall. D. the equilibrium price of apples falls and the equilibrium quantity of apples might rise or fall.
The gains from trade within a price system is
A) the sum of consumer surplus and producer surplus. B) consumer surplus less producer surplus. C) consumer surplus divided by producer surplus. D) consumer surplus multiplied by producer surplus.
The current percentage of the total work force represented by unions is approximately
A. 11%. B. 25%. C. 5%. D. 35%.