This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Suppose that firms find that their inventories are less than planned. In this case, what is the ... (Read 92 times)

bcretired

  • Hero Member
  • *****
  • Posts: 525
on: Jun 29, 2018
Suppose that firms find that their inventories are less than planned. In this case, what is the initial relationship between aggregate planned expenditure and real GDP? Using the aggregate expenditure model, what adjustments, if any, take place?
 
  What will be an ideal response?

Question 2

If expected future income increases, then
 
  A) the supply of loanable funds increases.
  B) the quantity of loanable funds supplied decreases.
  C) the supply of loanable funds decreases.
  D) the demand for loanable funds decreases.
  E) the quantity of loanable funds demanded increases.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

ju

  • Sr. Member
  • ****
  • Posts: 325
Reply #1 on: Jun 29, 2018
Answer to Question 1

If inventories are less than planned, aggregate planned expenditure exceeds real GDP. In order to restore their inventories to their desired levels, firms will increase their production. As a result, real GDP increases. Inventories remain less than planned and real GDP continues to increase until eventually real GDP reaches its equilibrium level, at which point actual and planned inventories are equal.

Answer to Question 2

C


bcretired

  • Member
  • Posts: 525
Reply 2 on: Jun 29, 2018
Gracias!

ashely1112

  • Member
  • Posts: 347
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

Many medications that are used to treat infertility are injected subcutaneously. This is easy to do using the anterior abdomen as the site of injection but avoiding the area directly around the belly button.

Did you know?

In 1835 it was discovered that a disease of silkworms known as muscardine could be transferred from one silkworm to another, and was caused by a fungus.

Did you know?

Blood in the urine can be a sign of a kidney stone, glomerulonephritis, or other kidney problems.

Did you know?

Although the Roman numeral for the number 4 has always been taught to have been "IV," according to historians, the ancient Romans probably used "IIII" most of the time. This is partially backed up by the fact that early grandfather clocks displayed IIII for the number 4 instead of IV. Early clockmakers apparently thought that the IIII balanced out the VIII (used for the number 8) on the clock face and that it just looked better.

Did you know?

IgA antibodies protect body surfaces exposed to outside foreign substances. IgG antibodies are found in all body fluids. IgM antibodies are the first type of antibody made in response to an infection. IgE antibody levels are often high in people with allergies. IgD antibodies are found in tissues lining the abdomen and chest.

Find the speed after 40.0 min if the initial speed is 3250 rev/min Find the speed after 40.0 min if the initial speed is 3250 rev/min
How to use the product rule to find the derivative of a function How to use the product rule to find the derivative of a function
Find Your Blind Spot Find Your Blind Spot
Find the derivative of g(z) = 4z^7 - 3z^-7 + 9z Find the derivative of g(z) = 4z^7 - 3z^-7 + 9z
To find derivative us the chain rule To find derivative us the chain rule
Competitive firms and maximization Competitive firms and maximization
Video: Fermentation pathways

For a complete list of videos, visit our video library