Consider a Simple Macro Model with a Constant Price Level

question 53

Multiple Choice

Consider a simple macro model with a constant price level and demand- determined output. In such a model, the level of national income will

• A)remain constant if firms are accumulating inventories.
• B)tend to rise if firms have unplanned decumulation of inventories.
• C)tend to rise if desired aggregate expenditure is less than actual national income.
• D)be in equilibrium if all of the resources of the economy are fully employed.
• E)remain constant if savings equals consumption.

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Definitions:

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