When the Spending of Consumers, Businesses, Government, and Foreigners (Net

question 88

Multiple Choice

When the spending of consumers, businesses, government, and foreigners (net exports) is less than the current level of output, Keynesian analysis indicates that

• A) the economy's output will fall short of its potential.
• B) prices will rise.
• C) equilibrium real GDP will increase.
• D) inventories will decline.

---

Definitions:

Doctrine

A set of beliefs, principles, or position, often held by an organization or a particular field of study.

Consideration

A concept in contract law that involves something of value promised to another when forming a contract.

Promise

A promise is a declaration or assurance that one will do a particular thing or that guarantees the happening or not happening of a specific event in the future.

Voidable Contract

A contract that may be voided or canceled by one of the parties.