Do not use chatgpt. When planned aggregate expenditure is less than real GDP, as in the diagram tothe right, what happens to firms' inventories?OA. Inventories fall as firms increase output.B. Inventories accumulate as firms increase production.C. Inventories fall if production is not scaled back.D. Inventories accumulate if production is not scaled back.100-Real Aggregate Expenditure, AE ($100 billions)40-7 8 9 8 8 8 8 820-30-50--004510 20 30 40 50 60 70 80 90 100Real GDP, Y ($100 billions)Y = AE

If the planned aggregate expenditure is less than real GDP, it means that companies are producing…

Answered: When planned aggregate expenditure is…

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter9: Aggregate Demand

Section: Chapter Questions

Problem 4.8P

See similar textbooks

Similar questions

W1
22
1
QUESTION 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 Expenditure
In the figure, equilibrium expenditure is equal to Aggregate planned expenditure (trillions of 2012 dollars 30 O A. $15 trillion. 25- O B. $5 trillion. 45-degree line O C. $10 trillion. 20- O D. $20 trillion. AE O E. None of the above answers are correct. 15- 10- 5- 0- 5 10 15 20 25 Real GDP (trillions of 2012 dollars)
d. What are the levels of saving and actual investment? Saving $1 billion Investment-$ billion e. In which direction and by what amount will unplanned investment change as the economy moves from the $380 billion level of GDP to the equilibrium level of real GDP? billion. Unplanned inventories will Click to select)) by $1 t. From the $340 billion level of real GDP to the equilibrium level of GDP? Unplanned inventories wi by $ foll fise billion.
A country reports that unplanned inventories increased during 2019. The increase in unplanned inventories leads to O a. the government decreasing production, which decreases GDP. O b. consumers increasing their consumption expenditure, which increases GDP. firms decreasing production, which decreases GDP. O d. actual aggregate expenditure being different than real GDP. e. firms increasing production, which increases GDP.
Economic
Y C 3. The following table shows income (Y) and consumption (C): Calculate: 100 105 L 125 110 II. 160 125 III. Marginal Propensity to Consume (MPC) Marginal Propensity to Save (MPS) Average propensity to save (APS) 200 140 4. Compute the Gross National Product (GNP) in I. II. Income approach Expenditure Approach a. Government R.O 5500 b. Total Rent of the land RO 3000 c. Export R.O 6500 d. Wages R.O 4000 e. Amount of Interest on capital R.O 3600- f. Consumption R.O 5100 g. Profits R.O 4800 h. Investments i. Import R.O 3400 R.O 6300
Gross Real GDP (after taxes) Investment $10 10 ITTIT 20 10 10 10 10 10 10 40 70 100 130 160 Consumption $-20 100 K Net exports +5 45 Government purchaies $15 7. Refer to the above table. If the full-employment real GDP is $70 the 15 15 15 15 15 15 OA) A. inflationary expenditure gap is $30. OB) B. recessionary and inflationary expenditure gaps are both $0. OC) C. inflationary expenditure gap is $10. OD) D. recessionary expenditure gap is $10.
Refer to the above table. Suppose investment is $12 billion and the economy revises its saving plans so as to save $4 billion more at all levels of income. The new equilibrium GDP will be: Domestic Output or Income (GDP = DI) $240 250 260 270 280 290 300 310 320 a. $270 billion b. $280 billion $260 billion $290 billion O c. O d. Clear my choice Consumption $244 250 256 262 268 274 280 286 292
QUESTION 21 What is the marginal propensity to consume? a. The ratio of the change in consumption to the change in national income O b. The proportion of national income that goes on consumption O c. The additional spending by a consumer when the price of a good falls O d. The additional revenue received by a firm when it attracts a new customer

SEE MORE QUESTIONS

Recommended textbooks for you

ECON MACRO

Economics

ISBN:

9781337000529

Author:

William A. McEachern

Publisher:

Cengage Learning

Essentials of Economics (MindTap Course List)

Economics

ISBN:

9781337091992

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Brief Principles of Macroeconomics (MindTap Cours…

Economics

ISBN:

9781337091985

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

ECON MACRO

Economics

ISBN:

9781337000529

Author:

William A. McEachern

Publisher:

Cengage Learning

Essentials of Economics (MindTap Course List)

Economics

ISBN:

9781337091992

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Brief Principles of Macroeconomics (MindTap Cours…

Economics

ISBN:

9781337091985

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS