Consider a Simple Macro Model with a Constant Price Level

question 151

Multiple Choice

Consider a simple macro model with a constant price level and demand-determined output.Suppose desired aggregate expenditures are less than the current level of national income.The vertical distance between the AE curve and the 45-degree line represents

• A)desired accumulation of inventories.
• B)desired decumulation of inventories.
• C)the amount by which output exceeds desired expenditures.
• D)the output gap.
• E)the amount by which desired expenditures exceeds output.

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Definitions:

Representational Ability

Piaget’s term for capacity to store mental images or symbols of objects and events.

Permanence

The state or quality of lasting or remaining unchanged indefinitely.

Coordination of Secondary Schemes

A developmental stage in infants around 8-12 months where they begin to combine learned behaviors in new ways.

Tertiary Circular

Relates to a stage in Piaget’s theory of cognitive development involving the purposeful adaptation of established behaviors in new contexts, observed in toddlers.