On the 45-degree line diagram, for points that lie above the 45-degree line
A) planned aggregate expenditure is less than GDP.
B) planned aggregate expenditure is greater than GDP.
C) planned aggregate expenditure is equal to GDP.
D) planned aggregate expenditure is less than aggregate income.
B
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Fred buys a fresh-off-the-assembly-line car from Wee-Rob-U Auto Sales. He paid $27,500, even though Wee-Rob-U acquired it for $23,000. What happens to this year's GDP?
A) Nothing. B) It increases by $4,500. C) It increases by $23,000. D) It increases by $27,500. E) It decreases by $4,500, because the dealer robbed Fred.
Briefly explain the shape of the per-worker production curve in the Solow model. If investment per worker initially exceeds saving per worker, how is the steady-state capital—labor ratio achieved?
What will be an ideal response?
Suppose that when the price of good X increases from $800 to $850, the quantity demanded of good Y increases from 65 to 70 . Using the midpoint method, the cross price elasticity of demand is about
a. -1.2, and X and Y are complements. b. -0.1, and X and Y are complements. c. 0.1, and X and Y are substitutes. d. 1.2, and X and Y are substitutes.
According to the text, which of the following does the United States export?
A. Cars, cigarettes, corn, and farm equipment, but not education. B. Cars, cigarettes, corn, farm equipment, and services. C. Lumber but not farm equipment. D. Cars and cigarettes but not corn.