Describe the relationship between aggregate planned expenditure, real GDP, and unplanned inventory changes
What will be an ideal response?
When aggregate planned expenditure exceeds real GDP, unplanned inventory changes are negative. When aggregate planned expenditure is less than real GDP, unplanned inventory changes are positive. When aggregate planned expenditure equals real GDP, unplanned inventory changes are zero, that is, there are no unplanned changes in inventories.
You might also like to view...
Jimmy's utility of wealth schedule is given in the table above. Jimmy has a job with a one-third chance of earning $200 and a two-thirds chance of earnings $400. Jimmy's cost of risk is
A) $0. B) $16.67. C) $33.33. D) Jimmy's cost of risk cannot be determined without more information.
Other things being equal, an increase in wages paid to workers in firms making digital devices will cause
A) the quantity of digital devices demanded to increase. B) the quantity of digital devices supplied to decrease. C) the supply of digital devices to decrease. D) the demand for digital devices to decrease.
The conclusion that a monopoly results in lower output and higher prices than perfect competition relies on the assumption that
A) the demand curve for a monopoly is horizontal. B) consumers are ignorant of the effects of monopoly. C) the costs of production are the same whether the industry is perfectly competitive or a monopoly. D) elasticity of demand varies along the market demand curve.
Which of the following decisions are complicated by the value of money changing over time?
A. Buying a $100 concert ticket B. Buying a $100 stock C. Buying a $100 sweater D. Buying a $100 blender