Suppose planned expenditures exceed output. Explain how equilibrium is restored in this economy
What will be an ideal response?
When planned expenditures exceed output, firms find that the demand for consumption and investment goods is greater than their current production. Facing increasing backlogs of orders for their products, firms increase production to restore equilibrium in the economy.
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Firms that survive in the long run are usually those that
A) become as large as possible. B) remain small. C) use more capital rather than more labor. D) earn the largest possible profit.
In a steady-state economy with no population growth, consumption per worker is 45, the saving rate is 25 percent, and the depreciation rate is 15 percent. The level of capital per worker is ________
A) 75 B) 36 C) 100 D) 27
In the foreign exchange market, people and firms exchange one currency to purchase another currency.
Select whether the statement is true or false. A. True B. False
Stagflation is a contraction, or stagnation, of a nation's output accompanied by inflation in the price level
Indicate whether the statement is true or false