How does the goods market return to equilibrium if AE is less than production?
What will be an ideal response?
With spending less than production, there is an unexpected increase in inventories. Rising inventories cause firms to cut production, and the economy will move down the AE line until it reaches equilibrium.
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Use the following graph for a private closed economy (an economy with only a private sector and no international trade) to answer the next question. 
In this economy, investment is
A. $50 billion. B. $150 billion. C. $100 billion. D. $200 billion.
_____ increase as we move away from unanimity rule
a. External costs b. Internal costs c. Pareto efficiency d. decision-making costs
Composites of stock prices
a. are completely random and unpredictable. b. fluctuate randomly around a rising trend. c. are destabilized by speculations. d. show no trend, but fluctuate widely.
If the money multiplier is 2.5 and the Fed buys $8 million in securities on the open market, transaction deposits could potentially
A. decrease by $25 million. B. increase by $25 million. C. decrease by $20 million. D. increase by $20 million.