When GDP Is at Its Equilibrium Value

question 56

Multiple Choice

When GDP is at its equilibrium value

• A) firms' inventories will neither increase nor decrease unexpectedly.
• B) employment and GDP are identical.
• C) the multiplier is zero.
• D) intended investment equals the 45-degree line.
• E) consumption equals disposable income.

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Definitions:

Rate Of Inflation

The percentage increase in the general price level of goods and services in an economy over a period, indicating the rate at which purchasing power is eroding.

Financing

The process of providing funds for business activities, making purchases, or investing, through mechanisms like loans, credit, or investment.

AFDC

Aid to Families with Dependent Children, a former federal assistance program in the United States designed to provide financial aid to children whose families had low or no income.

Military Draft

The compulsory enlistment of individuals into the armed forces.