The Economy Is in Equilibrium,TP = TE,and Real GDP Is

question 104

Multiple Choice

The economy is in equilibrium,TP = TE,and Real GDP is $500 billion.The MPC is 0.95,the multiplier is operative,and idle resources exist at each expenditure round.Autonomous investment spending rises by $4 billion.As a result,the TE curve shifts __________,inventory levels unexpectedly __________,business firms __________ the quantity of goods and services they produce,and Real GDP __________ by __________.

• A) upward; fall; increase; rises; $3.8 billion
• B) upward; fall; increase; rises; $8 billion
• C) downward; rise; decrease; falls; $80 billion
• D) upward; fall; increase; rises; $80 billion
• E) downward; fall; decrease; falls; $3.8 billion

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Definitions:

Integration

The process of attaining coordination across differentiated departments.

Decision-making Authority

The power or right vested in individuals or groups to make important decisions regarding policies, practices, or procedures within an organization.

Hierarchy

A system or organization in which people or groups are ranked one above the other according to status or authority.

Vertical Division of Labour

The differentiation of job roles based on hierarchical positions within an organization, where tasks are divided according to levels of authority and expertise.