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:

Ticket Price

The cost charged for admission to an event, such as a concert, movie, or sports game.

Speculators

Individuals or entities that trade securities, commodities, currencies, or other assets, not to use or consume them but rather to profit from changes in their prices.

Gold Prices

The cost per ounce or gram of gold in financial markets, which fluctuates based on supply and demand, market conditions, and global economic factors.

Gold Mine

A site for extraction of gold ore or minerals from the ground with the objective of producing gold through mining operations.