If aggregate supply decreases and aggregate demand remains unchanged
A. there will be no systematic relationship between the price level and the level of aggregate output.
B. there will be a negative relationship between the price level and the level of aggregate output.
C. the price level will remain unchanged, but aggregate output will decrease.
D. there will be a positive relationship between the price level and the level of aggregate output.
Answer: B
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If actual aggregate expenditure equals aggregate planned expenditure, then
A) firms obtain the desired change in their inventories. B) there is never any change in firms' inventories. C) unplanned inventory changes are negative. D) actual aggregate expenditure might be greater than, equal to, or less than real GDP. E) unplanned inventory changes are positive.
Which of the following is NOT held constant while moving along a supply curve?
A) expected future prices B) the number of sellers C) the price of the good itself D) prices of factors of production
Using Figure 3 below the distance between what 2 lines illustrate an inflationary expenditure gap?
A. PAE2 to PAE3
B. PAE1 to PAE2
C. Y1 to Y2
D. Y2 to Y3
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What will be an ideal response?