In the aggregate expenditures model, when output (real GDP) is greater than aggregate expenditure (AE) firms will
A. increase planned aggregate expenditure.
B. reduce planned aggregate expenditure.
C. increase production.
D. reduce production.
Answer: D
You might also like to view...
Refer to the Article Summary. According to the summary, the Chinese economy is trying to move away from an export based economy, while at the same time imports have declined. This decrease in exports and decrease in imports will
A) decrease net exports if the decline in exports is greater than the decline in imports. B) increase net exports if the decline in exports is greater than the decline in imports. C) definitely increase net exports. D) definitely decrease net exports.
As a general rule, antitrust authorities refer to any firm with a market share above ________ percent as a monopoly even though it is technically a dominant firm.
A) 66 B) 75 C) 95 D) 50
Exhibit 20-3 Money market demand and supply curves
?
In Exhibit 20-3, assume an equilibrium with an interest rate of 15 percent and the money supply at $100 billion. The Fed uses its policy tools to move the economy to a new equilibrium at E2 with money supply of $150 billion and an interest rate of 10 percent. This change could be the result of a(n):
A. open market sale of securities by the Fed. B. higher discount rate set by the Fed. C. higher required-reserve ratio set by the Fed. D. open market purchase of securities by the Fed.
When something happens to the economy, monetarists ask two questions:
A. What does this do to government spending, and what does it do to tax revenues? B. What does this do to real GDP, and what does it do to the price level? C. What does this do to investment spending, and what does it do to net exports? D. What does this do to the money supply, and what does it do to velocity?