The following table shows some information on a hypothetical economy. The table lists real GDP, consumption (C), investment (I), government spending (G), net exports (X - M), and aggregate expenditures (AE). In this problem, assume that investment, government spending, and net exports are independent of the economy's real GDP level. x- Unplanned Inventory Real GDP с I G M AE Investment Direction of Real GDP and Employment $500 $150 $70 $50 $270 $ -$40 $600 $ $70 $50 $270 $620 -$20 $700 $310 $70 $800 $ $70 $50 $ $470 $70 $50 $50 $270 $270 $270 $ $0 $780 $20 $860 $40 Using the numbers provided in the table, enter the correct numbers in the empty cells. Then, using the dropdown selection menus in the right-most column, indicate whether output will tend to increase, decrease, or remain in equilibrium at each level of real GDP in the table. (Note: The table uses negative numbers to indicate an unplanned inventory investment depletion and positive numbers to indicate an unplanned inventory investment accumulation.) True or False: The most fundamental assumption behind the aggregate expenditures model is that prices in the economy are fixed. True False
The following table shows some information on a hypothetical economy. The table lists real GDP, consumption (C), investment (I), government spending (G), net exports (X - M), and aggregate expenditures (AE). In this problem, assume that investment, government spending, and net exports are independent of the economy's real GDP level. x- Unplanned Inventory Real GDP с I G M AE Investment Direction of Real GDP and Employment $500 $150 $70 $50 $270 $ -$40 $600 $ $70 $50 $270 $620 -$20 $700 $310 $70 $800 $ $70 $50 $ $470 $70 $50 $50 $270 $270 $270 $ $0 $780 $20 $860 $40 Using the numbers provided in the table, enter the correct numbers in the empty cells. Then, using the dropdown selection menus in the right-most column, indicate whether output will tend to increase, decrease, or remain in equilibrium at each level of real GDP in the table. (Note: The table uses negative numbers to indicate an unplanned inventory investment depletion and positive numbers to indicate an unplanned inventory investment accumulation.) True or False: The most fundamental assumption behind the aggregate expenditures model is that prices in the economy are fixed. True False
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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