If firms sell what they expected to sell, which of the following will be true?
A) Aggregate expenditure will be greater than GDP.
B) Aggregate expenditure will be less than GDP.
C) There is no unplanned change in inventories.
D) Inventories will rise, and GDP and employment will fall.
C
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Exhibit 30-2
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Which of the following is an example of a positive externality?
a. Smoking a cigarette b. Driving a less fuel efficient vehicle c. Setting up a chemicals factory in a residential area d. Overuse of chemical fertilizers e. Beekeepers keeping bees for honey
An unplanned economy operating under laissez-faire
A. allocates resources by market supply and demand. B. cannot respond to basic questions about production and distribution. C. shows breakdowns with frequent surpluses and shortages. D. allocates goods and services under government subsidy.
All else equal, the price elasticity of demand for small-budget items such as soap tends to be ________ than the price elasticity of demand for big-ticket items such as flat-screen TVs.
A. lower B. higher C. very high D. the same