Real economic activity at full employment is unaffected by changes in investment spending when
A) interest rates are low.
B) velocity is flexible.
C) inventories are low.
D) prices are flexible.
D
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The economic question of "what to produce" is often referred to as the distribution question
a. True b. False
If the quantity demanded exceeds the quantity supplied in a market, then the result is which of the following?
a. Deadweight loss b. Inefficiency c. Underproduction d. Each of these are true.
In the aggregate expenditures model, if an economy operates above equilibrium GDP, there will be:
a. unplanned inventory accumulation. b. unplanned inventory depletion. c. an increase in GDP. d. an increase in employment.
The value (purchasing power) of each unit of money
a. is largely independent of the money supply. b. tends to increase as the money supply expands. c. increases as the general level of prices rise. d. is inversely related to the general level of prices.