All of the following are true when there is an unplanned decrease in inventories, except: O a. Actual investment is greater than planned investment O b. Real GDP will be rising O c. GDP is less than aggregate expenditures O d. Saving is less than planned investment
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Q: Assume in a simple economy that the level of saving is -$800 when aggregate output equals zero and…
A: S = - 800 + 0.25Y C = Y - S = Y + 800 - 0.25Y = 800 + 0.75
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- The difference between planned and unplanned spending is Select one: O a. always negative O b. unplanned changes in inventories O c inventories O d. always positiveQUESTION 6 Potential GDP Aggregate expenditure AE, 45° Y. Real GDP (Y) When real GDP is greater than Yo in the diagram above: O A. - inventories will decrease OB. ·Aggregate expenditure will be less than Real GDP OC. Aggregate expenditure will be equal to Real GDP OD. O D. inventories will increase QUESTION 7 Y G Xn $1,000 $1,400 1,400 1,400 1,400 1,400 $0 $800 -$200 2,500 5,000 7,500 10,000 2,300 3,800 5,300 6,800 1,000 1,000 1,000 1,000 -200 -200 -200 -200 Suppose you are given the data in the table above for a hypothetical economy. All data are in billions of dollars. Yis actual real GDP, and C, Ip, G, and Xn are the consumption, planned investment, government purchases, and net exports components of aggregate expenditures, respectively. Calculate the equilibrium GDP (give your answer in billions of $) Aggregate ExpenditureWhen there's an increase in the cost of electricity for operating firms machines: O a. The investment demand curve will shift to the right O b. The consumption schedule will shift downward O c. The saving schedule will shift downward O d. The investment demand curve will shift to the left
- Disposable Income Consumption $0 $400 500 800 1,000 1,200 1,500 1,600 2,000 2,000 2,500 2,400 3,000 2,800 Refer to Exhibit 10-8. When disposable income equals $1,500, saving equals O a. -$100. O b. S1,600. O C $1,800. O d. S100.hich theory of consumption best explains the consumption behavior of consumers of our economy? Question No: 02 [Marks: 10] If the State Bank started printing large quantities of Pakistani Rupees (Rs), what would happen to the number of Pakistani Rupees a dollar could buy? Why? Question No: 03 [Marks: 10] Deseribe the difference batuuean foreian diract investmet and foraion nortfolie invastment Who is mora likelu toBased on the information presented below, what is the equation representing the saving for this economy? GDP (Y) $0 100 200 300 Cunsumption (C) $60 120 180 240 Oa. S = -60 + 0.6Y O b. S = 60+ 0.4Y O c. S = -40 +0.75Y O d. S= -60+ 0.4Y Saving (S) S-60 -20 20 60 Investment (1) $100 100 100 100
- Problem 2 Consider an economy that is open to foreign trade and is described by the following model C= 100+0.9Yd |= 25 Consumption function Investment G=80 Government T=50 Таxes Exports Imports X=25 M= 50 Refer to problem 1. What is the equilibrium level of income? * Y= $1350 Y= $1850 Y= $2350 Y= $2650Question: How can there be "Autonomous Spending" even when a person has zero income? O a) All of the above are correct. b) People need to consume at least a minimum to stay alive. UO People need a certain level of consumption even if they do not have income. O d) People spend money from their savings, borrowing or from unemployment or pension pay.As consumer confidence in the future increases, consumption will _________and saving will O decrease; increase O decrease; decrease O increase; decrease O increase; increase OF
- Government spending does not affect the investment schedule. O a. True O b. False; shifts investment schedule to the right O c. False; makes investment schedule steeper or flatter O d. False; shifts investment schedule to the leftv Question Completion Status: A Moving to another question will save this response. Quèstion 4 Assume the economy's consumption and saving schedules simultaneously shift downward. This must be the result of: O A. The expectation of a recession O B. An increase in household wealth. O C. An increase in personal taxes. O D. An increase in disposable income. Moving to another question will save this response. SHARP AQUOSPotential GDP Aggregate expenditure AE, E, 45° Y. Real GDP (Y) When real GDP is greater than Yo in the diagram above: O A. inventories will decrease OB. O B: Aggregate expenditure will be less than Real GDP OC. Aggregate expenditure will be equal to Real GDP OD. -inventories will increase Aggregate Expenditure
