In the aggregate expenditures model, if aggregate expenditures (AE) equal $4 trillion and GDP equals $3 trillion, then:
a. inventory depletion equals ?$1 trillion.
b. inventory accumulation equals $1 trillion.
c. investment equals ?$1 trillion.
d. investment equals $1 trillion.
a
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The relationship between the overall price level in the economy and total production by firms is shown in the:
A. aggregate demand curve. B. aggregate supply curve. C. inflation rate. D. business cycle.
Which of the following is TRUE for a profit maximizing monopolist?
A) Marginal cost is always less than average total cost. B) In the long run, the firm's economic profit equals zero. C) In the short run, the firm will shut down if its marginal cost is less than its average variable cost. D) In the short run, the firm can make an economic profit even if its marginal cost is less than its average variable cost.
The wage paid to workers measured in terms of real purchasing power is called the:
A. cost of living. B. real wage. C. nominal wage. D. minimum wage.
Keynesian economics:
A. affirms the classical economists' basic premise concerning competitive markets. B. believes that monopolies and unions tend to be permanent fixtures in our economy and the prices they create tend to be flexible, at least downwardly. C. emphasizes the possibility that an economy can never be in equilibrium at less than full employment. D. believes that unemployment results when aggregate demand is insufficient to reach a full-employment level of real GDP.