Consider the Simplest Macro Model with a Constant Price Level

question 80

Multiple Choice

Consider the simplest macro model with a constant price level and demand- determined output. If national income is less than its equilibrium level, it is likely that firms' inventories are _ , and so national income tends to .

• A)constant; fall
• B)being depleted; rise
• C)accumulating; fall
• D)accumulating; rise
• E)being depleted; fall

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Definitions:

Low-Income DVCs

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G8 Nations

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Debt Cancellation

The action of forgiving or eliminating all or part of a debt, making the borrower free from repaying the amount owed.

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A situation where the economic conditions and performance of one country or region are heavily influenced by another.