Fill in blanks based on the table 1. First blank pick from these choices- A. The economy is in equilibrium B. Firms would have a $50 billion reduction in inventories C. Firms would have excess inventories of $50 billion D. Agreggate expidenture must also equal $900 billion 2. Second blank pick from these choices- A. Decrease production B. Keep production the same C. Increase production
Fill in blanks based on the table 1. First blank pick from these choices- A. The economy is in equilibrium B. Firms would have a $50 billion reduction in inventories C. Firms would have excess inventories of $50 billion D. Agreggate expidenture must also equal $900 billion 2. Second blank pick from these choices- A. Decrease production B. Keep production the same C. Increase production
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Fill in blanks based on the table
1. First blank pick from these choices-
A. The economy is in equilibrium
B. Firms would have a $50 billion reduction in inventories
C. Firms would have excess inventories of $50 billion
D. Agreggate expidenture must also equal $900 billion
2. Second blank pick from these choices-
A. Decrease production
B. Keep production the same
C. Increase production
Transcribed Image Text:6. Aggregate expenditure and income
Suppose the following table shows consumption (C), investment (I), government purchases (G), and net exports (NX) in a hypothetical economy
for various levels of real GDP. Assume that the price level remains unchanged at all levels of real GDP.
Real GDP
I
G
NX
(Billions of dollars) (Billions of dollars) (Billions of dollars) (Billions of dollars) (Billions of dollars)
500
250
250
200
-150
600
325
250
200
-150
700
400
250
200
-150
800
475
250
200
-150
900
550
250
200
-150
Transcribed Image Text:Suppose real GDP is currently $900 billion. Assuming that the price level remains constant, this would mean that
which would send a signal to firms to
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