The structural deficit declines as the economy moves toward full employment.
Answer the following statement true (T) or false (F)
False
The structural deficit is the deficit when the economy is at full employment.
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When an expansion is triggered by a(n) ________ in autonomous expenditure, the economy turns the corner into ________, and aggregate planned expenditure exceeds real GDP. Firms' inventories ________
A) increase; recession; decrease B) increase; recession; increase C) increase; expansion; increase D) increase; expansion; decrease E) decrease; expansion; decrease
Which of the following is not consistent with a self-correcting economy?
a. Falling wages that correct a recessionary gap b. Falling prices that correct a recessionary gap c. Rising prices that correct an expansionary gap d. Tendency of the short-run aggregate supply to shift until it intersects aggregate demand at potential GDP e. An active approach to a recession or depression
When personal computers became popular, several new firms entered the competition. What effect did this have on supply?
A. Increase in the quantity supplied B. Decrease in the quantity supplied C. Shift of the supply curve to the left D. Shift of the supply curve to the right
Calculate GDP for an economy with exports of $5 trillion, investment of $1.5 trillion, consumption spending of $11 trillion, imports of $6 trillion, and government purchases of $3 trillion