Consider a Simple Macro Model with a Constant Price Level

question 36

Multiple Choice

Consider a simple macro model with a constant price level and demand-determined output.If national income is above its equilibrium level,it is likely that inventories are ________,and so national income tends to ________.

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

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Definitions:

Held-To-Maturity

A classification for investment securities that the investor has the intent and ability to hold until they mature.

Available-For-Sale

A classification for investments in securities that are not actively traded or held to maturity, allowing gains or losses to be recorded in equity.

Trading

The act of buying and selling securities, commodities, or other financial instruments in financial markets with the aim of profiting from price movements.

Trading Securities

Financial instruments that are purchased and held primarily for selling them in the near term, with the objective of generating profits on short-term price differences.