Consider a Simple Macro Model with a Constant Price Level

question 50

Multiple Choice

Consider a simple macro model with a constant price level and demand-determined output. When national income falls short of desired aggregate expenditures, unplanned inventory will induce firms to
The rate of output production.

• A) depletion; lower
• B) depletion; raise
• C) buildup; lower
• D) buildup; raise
• E) at zero; maintain the current

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Definitions:

Prices

The amounts of money expected, required, or given in payment for something.

Industry

The production of goods or services within an economy that are related by their primary business activities, sector, or domain.

Cutthroat Oligopolist

A situation in an oligopoly where companies compete aggressively, often with price cuts, to the detriment of their competitors.

Prices

The sum of money needed to buy a product or service.