The economy is in equilibrium, TP = TE, and Real GDP is $500 billion. The MPC is 0.95, the multiplier is operative, and idle resources exist at each expenditure round. Autonomous investment spending rises by $4 billion. As a result, the TE curve shifts __________, inventory levels unexpectedly __________, business firms __________ the quantity of goods and services they produce, and Real GDP
__________ by __________.
A) upward; fall; increase; rises; $3.8 billion
B) upward; fall; increase; rises; $8 billion
C) downward; rise; decrease; falls; $80 billion
D) upward; fall; increase; rises; $80 billion
E) downward; fall; decrease; falls; $3.8 billion
D
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A. An economic boom in the United States B. An economic boom in Europe C. Increased vacations in the United States by Europeans D. A recession in Europe
Discuss why the Fed rarely changes the reserve requirements
Suppose that unemployment increases because the government requires employers to provide more funds for their employees' retirement programs. The increase in unemployment is most likely a result of an increase in
A. frictional unemployment. B. structural unemployment. C. cyclical unemployment. D. the natural rate of unemployment.
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A. private property and individual good will toward others. B. government planning and individual good will toward others. C. private property and individual planning. D. government planning and individual self-interest.