If the amount that consumers wish to save at the full employment level of income is greater than the amount that businesses plan to invest, then
a. there will be an inflationary gap.
b. there will be a recessionary gap.
c. total demand will exceed potential GDP.
d. the economy will move to a higher level of output.
b
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Along the short-run Phillips curve SRPC0 the natural unemployment rate is
A) 7 percent. B) 3 percent. C) 6 percent. D) an amount that can be determined from the figure, but none of the above answers is correct. E) an amount that cannot be determined from the figure. The figure above shows some Phillips curves for an economy.
Answer the following statements true (T) or false (F)
1. The break-even point on a break-even chart is equivalent to the point where MR = MC on a cost/output graph. 2. It may be beneficial for a firm that is suffering a loss to continue to operate in the short run as long as it is recovering its fixed cost. 3. Any revenue over and above total cost is labeled economic profit. 4. Wages paid are an example of an explicit cost of doing business. 5. Marginal cost is equal to the increase in total cost per unit of input divided by marginal product. 6. Under perfectly competitive conditions, marginal revenue is equal to the price at which a good is sold. 7. Average total cost is equal to total cost divided by marginal product. 8. Normal profit is considered an opportunity cost of operating a business.
Suppose that a technological advance raises total factor productivity. Explain, step-by-step, how the economy adjusts to arrive at a new long-run equilibrium
What will be an ideal response?
The domestic currency of a country depreciates in value when: a. there is an increase in the foreign currency price of the domestic currency. b. its value falls in relation to another currency
c. the government of the country revaluates the domestic currency. d. its value rises in relation to another currency. e. there is a fall in the domestic demand for foreign currency.