In a small economy in 2011, aggregate expenditure was $800 million while GDP that year was $850 million. the following can explain the difference between aggregate expenditure and GDP that year?
What will be an ideal response?
firm investments in inventories was greater than anticipated in 2011
You might also like to view...
Suppose the government of New Country has fixed the value of its currency, the New Peso, at $1 per New Peso, but the market equilibrium value of the New Peso is $2 per New Peso. In order to maintain the official value of the New Peso the Central Bank of New Country must either ________ domestic interest rates, or ________the supply of international reserves by purchasing New Pesos
A. lower; decrease B. lower; increase C. raise; decrease D. raise; increase
In the United States in 2014, about ________ of uninsured people live in families in which at least one member has a job
A) 12%. B) 38%. C) 70%. D) 98%.
The international financial market moved towards equilibrium under the gold standard due to
A) shifts in exchange rates caused by changes in supply and demand for foreign exchange. B) changes in interest rates. C) negotiations among central banks. D) flows of gold among countries.
The crowding-out effect occurs when household consumption and investment spending decrease as a result of financing a budget deficit
a. True b. False Indicate whether the statement is true or false