If aggregate planned expenditure is greater than GDP, then
A) the consumption function will shift downward to restore the equilibrium.
B) a recession will result.
C) inventory investment is larger than planned.
D) production is too high.
E) inventory investment is smaller than planned.
E
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According to the quantity theory of money, if the money supply grows at 6%, real GDP grows at 2%, and the velocity of money is constant, then the inflation rate will be
A) 8%. B) 6%. C) 4%. D) 2%.
If a person earns an 8 percent nominal rate of interest on his savings account in a year when inflation is 9 percent, the person's real rate of interest is
a. -1 percent. b. 1 percent. c. 8 percent. d. 9 percent.
How does an increase in near term spending needs affect the supply and demand curve for money?
Which of the following is not a characteristic of perfectly competitive markets?
A. Long-run economic profits B. Identical products C. Many sellers D. Free entry and exit