Consider a Simple Macro Model with a Constant Price Level

question 57

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

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Definitions:

Behavioral

Relating to the actions or reactions of a person or animal in response to external or internal stimuli, often studied in psychology and behavioral sciences.

Mental

Relating to the mind or psychological processes.

Performance

The act of carrying out or accomplishing an action, task, or function, often measured against known standards of accuracy, completeness, and speed.

Stress Increases

Refer to situations or conditions that elevate levels of psychological or physical tension, often caused by challenges or demands.