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41) When investment exceeds planned investment, aggregate planned expenditure ________

Question : 41) When investment exceeds planned investment, aggregate planned expenditure ________ : 1964269

41) When investment exceeds planned investment, aggregate planned expenditure is ________ than actual aggregate expenditure and inventories are ________ than planned.

A) greater; greater

B) greater; less

C) less; greater

D) less; less

42) In the aggregate expenditure model, when real GDP is greater than aggregate planned expenditure,

A) unplanned inventories are being accumulated.

B) inventories are being depleted.

C) inventories are not being changed.

D) this cannot happen, because the two variables are always equal.

43) Equilibrium expenditure is defined as the level of aggregate expenditure where

A) actual aggregate expenditure equals real GDP.

B) total inventories equal zero.

C) aggregate planned expenditure equals real GDP.

D) spending equals output.

44) When the economy is in equilibrium,

A) planned investment equals actual investment.

B) planned savings will equal zero.

C) there can be no unemployment.

D) changes in autonomous spending will have no impact on real GDP.

45) At equilibrium expenditure

A) consumers' expenditures on goods and services equal firms' purchases of investment goods.

B) firms hold no inventories of raw materials or final goods.

C) aggregate planned expenditure equals real GDP.

D) aggregate planned expenditure equals real GDP minus net exports.

46) At equilibrium expenditure, unplanned changes in inventory

A) must be positive.

B) must be zero.

C) must be negative.

D) might be either positive or negative.

47) Equilibrium expenditure occurs where

A) the aggregate expenditure curve crosses the 45-degree line.

B) planned expenditures exceed national income.

C) savings exceed planned investment.

D) All of the answers are correct.

48) Equilibrium expenditure occurs where the aggregate expenditure curve crosses the

A) 45-degree line.

B) horizontal axis.

C) vertical axis.

D) consumption function.

Real

GDP

C

I

G

X - M

2500

1430

540

400

90

2400

1360

540

400

100

2300

1290

540

400

110

2200

1220

540

400

120

2100

1150

540

400

130

49) In the above table, C is consumption expenditure, I is investment, G is government expenditure, and X - M is net exports. All entries are in dollars. The equilibrium level of real GDP is

A) $2,500.

B) $2,400.

C) $2,300.

D) $2,200.

50) In the above table, C is consumption expenditure, I is investment, G is government expenditure, and X - M is net exports. All entries are in dollars. The slope of the aggregate expenditure function is

A) -0.10.

B) 0.10.

C) 0.60.

D) 0.70.

Real GDP

C

I

G

X

M

100

75

25

95

10

1

200

150

25

95

10

2

300

225

25

95

10

3

400

300

25

95

10

4

500

375

25

95

10

5

600

450

25

95

10

6

700

525

25

95

10

7

800

600

25

95

10

8

900

675

25

95

10

9

1000

750

25

95

10

10

Solution
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Economics 1 Week Ago 79 Views
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