Suppose total planned expenditures equal $100 billion when the value of the price level is 100. If the price level drops to 90, total planned real expenditures will equal
A. less than $100 billion.
B. more than $100 billion.
C. $100 billion.
D. None of these: Cannot be determined without additional information.
Answer: B
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The Federal Reserve System was created to
A) make it easier to finance budget deficits. B) promote financial market stability. C) lower the unemployment rate. D) promote rapid economic growth.
The loss associated with the fact that at the profit-maximizing quantity consumers value the goods more than it cost to produce them is called
A) deadweight loss. B) comparative loss. C) Lerner Loss. D) Consumer Value Loss.
If marginal cost is rising,
a. average variable cost must be falling. b. average fixed cost must be rising. c. marginal product must be falling. d. marginal product must be rising.
If the marginal propensity to consume is 4/5 then what must the marginal propensity to save?
a. 2/5 b. 3/5 c. 8/10 d. 1/5