Which of the following statements is true?
A) When TP = TE (total production = total expenditures), the economy is necessarily producing Natural Real GDP.
B) When TP is greater than TE, inventory levels unexpectedly fall.
C) When TE is greater than TP, inventory levels unexpectedly rise.
D) b and c
E) none of the above
E
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If interest rates are lowered
A. people are more likely to save their money in banks. B. people are not affected by interest rates being lowered, only when interest rates are raised. C. entrepreneurs are more likely to expand a business by borrowing money. D. entrepreneurs are less likely to borrow money.
The ceteris paribus assumption is important to use when building economic models
Indicate whether the statement is true or false
If we are currently at point T, we can get to point S in the long run
A. through economic growth over a period of years.
B. immediately by using resources more efficiently.
C. immediately by reducing the unemployment rate.
D. immediately through technological development.
If external benefits exist:
A.) The market will overproduce the good. B.) Private demand will exceed social demand. C.) Market demand will understate social demand. D.) The market will generate the optimal outcome.