Which of the following is correct if real GDP is $20.5 trillion and spending is $20 trillion?
What will be an ideal response?
Spending is less than output by $0.5 trillion.
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In the new classical model, the aggregate supply schedule depends on
a. the expected level of the money stock. b. the expected price level. c. the expected values of fiscal policy variables and other possible determinants of aggregate demand. d. Both a and c e. All of the above
To serve the public interest, government sometimes promotes competition by breaking up natural monopolies
a. True b. False
Full employment is defined by all economists as precisely 5 percent of the labor force
a. True b. False Indicate whether the statement is true or false
In the Bertrand model,
A. each firm takes the quantities produced by its rivals as given. B. one firm plays a leadership role and its rivals merely follow. C. each firm takes the prices charged by its rivals as given. D. prices are higher and quantities are slightly less than we would see if the firms colluded to achieve the monopoly outcome.