Assume an Economy Is in Equilibrium at an Output Level

question 254

Multiple Choice

Assume an economy is in equilibrium at an output level of $600 billion. If government purchases decrease by $75 billion, then at the output level of $600 billion, there is

• A) an unplanned increase in inventories.
• B) an unplanned inventory change of zero.
• C) either an unplanned increase or decrease in inventories depending on the value of the MPC.
• D) an unplanned decrease in inventories.

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Definitions:

Family Experiences

The range of interactions and events that occur within a family setting, influencing development and personal relationships.

Ecological Fallacy

Acting with the mistaken assumption that a generalized cultural value applies always and equally to all members of the culture.

Invisible Barrier

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The process of gaining higher-level positions, responsibilities, and rewards within one's profession over time.