When we compare PAE and actual output (Y) if PAE is greater than Y we expect that:
A. there will be no change in inventories.
B. the government will spend more than it has collected in taxes.
C. inventories to decrease.
D. inventories to increase.
Answer: C
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Which of the following is the most likely explanation for inflation in the United States?
A) decreases in aggregate demand B) decreases in aggregate supply C) increases in aggregate demand D) increases in aggregate supply
Suppose a cancer patient decides to forsake weekly chemotherapy treatments in order to spend more meaningful, loving time with her friends and family. In cases where patients refuse treatment,
A) there are indeed substitute for chemotherapy, such as time with family. B) the patient is behaving irrationally. C) the patient doesn't know what is in her long-run best interest. D) the patient fails to see that chemotherapy is a better substitute than time with the family.
Assume that inventories declined by more than analysts predicted. This implies that
A) planned aggregate expenditure was less than real GDP. B) planned aggregate expenditure is unrelated to real GDP. C) planned aggregate expenditure was greater than real GDP. D) planned aggregate expenditure was equal to real GDP.
A photograph processing machine company requiring customers that buy a processing machine to purchase chemicals and photographic paper from them is an example of
A) bundling. B) a requirement tie-in sale. C) quantity discrimination. D) a two-part tariff.