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 87 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
YES! Correct, THANKS for helping me on my review

xiazhe

  • Member
  • Posts: 331
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

The types of cancer that alpha interferons are used to treat include hairy cell leukemia, melanoma, follicular non-Hodgkin's lymphoma, and AIDS-related Kaposi's sarcoma.

Did you know?

The tallest man ever known was Robert Wadlow, an American, who reached the height of 8 feet 11 inches. He died at age 26 years from an infection caused by the immense weight of his body (491 pounds) and the stress on his leg bones and muscles.

Did you know?

Autoimmune diseases occur when the immune system destroys its own healthy tissues. When this occurs, white blood cells cannot distinguish between pathogens and normal cells.

Did you know?

Ether was used widely for surgeries but became less popular because of its flammability and its tendency to cause vomiting. In England, it was quickly replaced by chloroform, but this agent caused many deaths and lost popularity.

Did you know?

Though the United States has largely rejected the metric system, it is used for currency, as in 100 pennies = 1 dollar. Previously, the British currency system was used, with measurements such as 12 pence to the shilling, and 20 shillings to the pound.

Because of immature visual-motor coordination, young children find it hard to throw and catch small ... Because of immature visual-motor coordination, young children find it hard to throw and catch small ...
How to find two positive angles less than 360° that have a tangent of −2.25 How to find two positive angles less than 360° that have a tangent of −2.25
How to find the inverse of any function (Part 2) How to find the inverse of any function (Part 2)
How to find the equation of a line that is parallel to a line passing through a point How to find the equation of a line that is parallel to a line passing through a point
Suppose that we have a sample space with five equally likely experimental outcomes: E1, E2, E3, ... Suppose that we have a sample space with five equally likely experimental outcomes: E1, E2, E3, ...
The family described in Example Case 4 The family described in Example Case 4
Video: Structures that affect circulation - heart and MABP

For a complete list of videos, visit our video library