How can actual investment be greater than desired investment, and what type of gap is the economy experiencing when this occurs?
What will be an ideal response?
Actual investment includes the purchases of plants and equipment plus actual changes in inventory. Desired investment includes purchases of plants and equipment plus desired changes in inventory. If actual investment is greater than desired investment, there must be an accumulation of undesired inventory. When producers are left with undesired inventory, this is a signal that the economy is experiencing a recessionary gap.
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The long-run supply curve of a perfectly competitive market is a:
a. an upward rising step function. b. a downward sloping step function. c. a vertical line at the market price. d. a horizontal line at the market price.
The opportunity cost of investing in a new lithotripter (a machine that pulverizes kidney stones with sound waves) is:
a. defined by the dollar cost of the equipment. b. defined by the next best use of the money invested in the equipment. c. the same for every health care provider. d. impossible to calculate. e. measured by the difference between the expected revenues from selling the services of the lithotripter and the invoice cost of the machine
If the supply and demand curves cross at a quantity of 100, then the price necessary to get firms to sell more than that will have to be ________ equilibrium.
A. within 10% either way of B. above C. at D. below
What is the term for a situation in which a person is overqualified for the job he or she has?
(A) Partial employment (B) Discouraged worker (C) Underemployment (D) Low-skilled work