In the aggregate expenditures model, if an economy operates above equilibrium GDP, there will be:
a. unplanned inventory accumulation.
b. a decrease in GDP.
c. a decrease in employment.
d. all of the above.
d
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Use the following information to answer the next question.C = A + .875(Y - T)A = $10,000I = $2,000G = $2,500T = $1,000NX = $1,025What will be the change in consumption if net exports decrease by $250?
A. Consumption will not change. B. Consumption will fall by $1,750. C. Consumption will rise by $218.75. D. Consumption will fall by $250.
If a bond pays $50 a year to its holder and you buy it for $200, what is your interest rate?
What will be an ideal response?
When the profits of firms that produce import-competing goods and services fall, these firms ________ their workforce, unemployment in these industries ________, and wages ________
A) cut; decreases; rise B) cut; decreases; fall C) cut; increases; fall D) expand; increases; rise E) cut; increases; rise
In the four-part diagram used to construct the IS curve, a decrease in the interest rate causes
A) an increase in Ap and induced saving but does not shift the IS curve. B) an increase in Ap and induced saving and shifts the IS curve to the right. C) a decrease in Ap, an increase in induced saving, and shifts the IS curve to the right. D) a decrease in Ap and a decrease in induced saving, but does not shift the IS curve.