Unintended changes in inventories:
A. cause the economy to move away from the equilibrium GDP.
B. are treated as components of consumption.
C. bring actual investment and saving into equality only at the equilibrium level of GDP.
D. bring actual investment and saving into equality at all levels of GDP.
D. bring actual investment and saving into equality at all levels of GDP.
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What will be an ideal response?
Sarah has the utility function U(X,Y) = X.5Y.25. When Sarah consumes X = 2 and Y = 6 she has a marginal rate of substitution of
A) -12. B) -1/6. C) -6. D) -1/12.
Under perfect competition, a firm is a price taker because:
a. setting a price higher than the going price results in profits. b. each firm's product is perceived as different. c. each firm has a significant market share. d. setting a price higher than the going price results in zero sales.
A proprietorship is
A) two or more individuals in business together. B) a corporation that is taxed like an individual. C) a business owned by one individual who makes all of the decisions. D) a government-owned franchise.