Assume an Economy Is in Equilibrium at an Output Level

question 145

Multiple Choice

Assume an economy is in equilibrium at an output level of $1,500 billion. If government spending increases by $200 billion, then at the output level of $1,500 billion, there is

• A) an unplanned rise in inventories.
• B) an unplanned fall in inventories.
• C) an unplanned inventory change of zero.
• D) either an unplanned increase or decrease in inventories depending on the value of the MPC.

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Definitions:

Age

The length of time that an individual has lived or a thing has existed.

Countries Visited

A count or list of nations that an individual has traveled to.

Friedman Test

A method of statistical analysis that does not assume a specific parameter model, used for identifying differences in treatment outcomes over multiple tests.

Level Of Significance

A statistical measure that indicates the probability of rejecting the null hypothesis when it is actually true, used to determine the reliability of a test result.