8. Comparing total expenditures and total production The following graph shows total production (TP) and total expenditures (TE) for a hypothetical economy. Suppose Real GDP is $425 billion. TOTAL EXPENDITURE (Billions of dollars) 600 575 550 525 475 450 425 400 400 425 450 475 500 525 550 575 600 REAL GDP (Billions of dollars) (TP = Real GDP) TE If Real GDP is $425 billion, inventories decrease, do not change, or increase the firms cut back, do not change, or raise production, and Real GDP decrease to $400, does not change, increases to $475, or increases to $600
8. Comparing total expenditures and total production The following graph shows total production (TP) and total expenditures (TE) for a hypothetical economy. Suppose Real GDP is $425 billion. TOTAL EXPENDITURE (Billions of dollars) 600 575 550 525 475 450 425 400 400 425 450 475 500 525 550 575 600 REAL GDP (Billions of dollars) (TP = Real GDP) TE If Real GDP is $425 billion, inventories decrease, do not change, or increase the firms cut back, do not change, or raise production, and Real GDP decrease to $400, does not change, increases to $475, or increases to $600
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter7: Production And Growth
Section: Chapter Questions
Problem 5CQQ
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TOPIC: Comparing total expenditures and total production
![8. Comparing total expenditures and total production
The following graph shows total production (TP) and total expenditures (TE) for a hypothetical economy. Suppose Real GDP is $425 billion.
TOTAL EXPENDITURE (Billions of dollars)
600
575
550
525
475
450
425
400
400
425
450
475
500
525
550
575
600
REAL GDP (Billions of dollars)
(TP = Real GDP)
TE
If Real GDP is $425 billion, inventories
decrease, do not
change, or increase
the firms
cut back, do not
change, or raise
production, and Real GDP
decrease to $400,
does not change,
increases to $475,
or increases to $600](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7f196d9a-e719-4604-9aab-dc6c399620c1%2Fb750d163-6650-47c8-8aa5-7caacef16a4f%2F8m2wxp_processed.jpeg&w=3840&q=75)
Transcribed Image Text:8. Comparing total expenditures and total production
The following graph shows total production (TP) and total expenditures (TE) for a hypothetical economy. Suppose Real GDP is $425 billion.
TOTAL EXPENDITURE (Billions of dollars)
600
575
550
525
475
450
425
400
400
425
450
475
500
525
550
575
600
REAL GDP (Billions of dollars)
(TP = Real GDP)
TE
If Real GDP is $425 billion, inventories
decrease, do not
change, or increase
the firms
cut back, do not
change, or raise
production, and Real GDP
decrease to $400,
does not change,
increases to $475,
or increases to $600
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