Exhibit 9-3 Keynesian aggregate expenditures model
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As shown in Exhibit 9-3, if GDP is $14 trillion, the economy experiences unplanned inventory:
A. accumulation of $12 trillion.
B. depletion of $14 trillion.
C. accumulation of $2 trillion.
D. depletion of $4 trillion.
Answer: C
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If events in a single country cause its economic activity to move up or down through a business cycle, what difference(s) might it make that the economy is closely integrated with other economies in the world?
What will be an ideal response?
The national debt
a. is currently greater than the annual federal deficit b. is reduced by the revenue generated from the federal deficit c. decreases as the deficit is reduced d. is a flow variable e. varies depending on developments in the stock market
If the price of inputs falls and the budget deficit rises due to an increase in government spending, then the:
a. Price index rises, and the change in real GDP is uncertain. b. Price index falls, and real GDP rises. c. Price index is uncertain, and real GDP rises. d. Price index falls, and real GDP falls. e. Price index falls and the change in real GDP is uncertain.
Which of the following will be the most likely impact of an unanticipated increase in the money supply?
What will be an ideal response?