Which of the Following Statements Is True About Equilibrium in the Aggregate

question 98

Multiple Choice

Which of the following statements is true about equilibrium in the aggregate expenditures model?
I. Equilibrium is found at the level of real GDP at which the aggregate expenditures curve
Crosses the 45-degree line.
II. In equilibrium, real GDP produced equals aggregate expenditures.
III. In equilibrium, inventories equal zero.
IV. In equilibrium, real GDP produced equals potential real GDP.

• A) I only
• B) I and II only
• C) I, II, and III only
• D) I, II, III, and IV

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Definitions:

Action Potential

A brief electrical impulse by which information is transmitted along the axon of a neuron.

Electrical Charge

A fundamental property of matter that causes it to experience a force when placed in an electromagnetic field, existing in two types: positive and negative.

Dendrite

A branched extension of a neuron that receives impulses from other neural cells and transmits them toward the cell body.

Absolute Refractory Period

A period immediately following the transmission of an impulse in nerve or muscle in which a nerve or muscle is incapable of generating another impulse.