In the aggregate expenditures model, if aggregate expenditures (AE) are greater than GDP, then:
A. inventory is unchanged.
B. inventory is accumulated.
C. employment decreases.
D. GDP increases.
Answer: D
You might also like to view...
Direct transfer programs are generally less efficient and less politically acceptable than subsidy programs
a. True b. False
In addition to the positive welfare effects that free trade has on an economy, there are a variety of other benefits of international trade. Consider the following scenario:
Without free trade, Sapphira has market power as a local producer. Once free trade is implemented in the local economy, Sapphira is no longer able to raise its prices above competitive levels. The previous scenario represents which of the following benefits of free trade? a. Lower costs through economies of scale b. Increased competition c. Increased variety of goods d. An enhanced flow of ideas
The indifference curve in the diagram yields Juan 100 units of utility. If Juan's money income were to increase by 20 percent, the indifference curve would:
A. shift leftward.
B. shift rightward.
C. become steeper.
D. not be affected.
Under the original Gramm-Rudman-Hollings Act, a congressionally enacted budget deficit that was larger than the targeted amount would
A. result in both automatic tax cuts and spending increases. B. result in automatic spending cuts. C. result in automatic tax cuts. D. result in automatic spending increases.