Assuming that C + Ir + G > C + I + G, then
a. there is an unintended inventory accumulation.
b. there is an unintended inventory shortfall.
c. aggregate demand is less than output.
d. Both b and c
A
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Explain the principle of the "second best."
What will be an ideal response?
Refer to the above table. Amy's utility schedule shows
a. increasing marginal utility throughout the entire schedule.
b. initially increasing marginal utility and then decreasing marginal utility.
c. initially decreasing marginal utility and then increasing marginal utility.
d. diminishing marginal utility throughout the entire schedule.
Suppose that consumers expect the price of a product to decrease in the future. The result is that:
A. the current demand for the product increases. B. the current demand for the product decreases. C. the current supply of the product increases. D. the current supply of the product decreases.
The nominal rate of interest is 3% and the anticipated rate of inflation is 4%. What is the real rate of interest?
A) 1% B) -1% C) 4% D) 9%