Author Question: If the level of real GDP is 14 trillion while aggregate planned expenditure is 15 trillion, then ... (Read 78 times)

Pineapplelove6 · **on:** Jun 29, 2018

If the level of real GDP is 14 trillion while aggregate planned expenditure is 15 trillion, then

A) inventories rise more than planned, leading firms to increase production.
B) real GDP increases and planned expenditure decreases reaching equilibrium in the middle.
C) aggregate planned expenditure decreases to reach the equilibrium of 14 trillion.
D) inventories fall more than planned, leading firms to increase production.
E) inventories rise more than planned, leading firms to cut production.

Question 2

If real GDP grows by 3 percent, the velocity of circulation does not change, and the quantity of money grows by 3 percent, then in the long run the inflation rate is

A) 0 percent. B) 6 percent. C) -3 percent. D) -6 percent. E) 3 percent.