Refer to the diagram for a private closed economy. The $400 level of GDP is:
A. that output at which saving is zero.
B. too high because consumption exceeds investment.
C. unstable because aggregate expenditures exceed GDP.
D. unstable because aggregate expenditures are less than GDP.
D. unstable because aggregate expenditures are less than GDP.
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In the prisoners' dilemma game, each player
A) has only one possible strategy. B) can choose from two strategies. C) can choose from three strategies. D) can choose from four strategies.
Vouchers create the efficient outcome only if production is such that the marginal social cost
A) exceeds the marginal private benefit. B) equals the marginal external benefit. C) equals the marginal social benefit. D) is decreased so it equals the marginal private cost.
One factor hastening the demise of the Soviet Union was _____
a. its military alliance with Cuba b. its attempt to keep up with the United States in an arms race c. its inability to predict the optimal amount of defense spending d. its strong economic output
Those who prefer a passive approach to the conduct of macroeconomic policy tend to believe that markets are self-correcting
a. True b. False Indicate whether the statement is true or false