Assume an economy is in equilibrium at an output level of $1,600 billion. If government purchases increase by $200 billion, then at the output level of $1,600 billion, there is
A. an unplanned decrease in inventories.
B. an unplanned increase in inventories.
C. an unplanned inventory change of zero.
D. either an unplanned increase or decrease in inventories depending on the value of the MPC.
Answer: A
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$10 per hour.
What will be an ideal response?