Author Question: Within the framework of the aggregate expenditures model, what will happen if an economy is ... (Read 54 times)

vicky · **on:** Jun 30, 2018

Within the framework of the aggregate expenditures model, what will happen if an economy is operating at a real GDP greater than full-employment real GDP?
a. An inflationary gap exists.
b. Real GDP will fall.
c. The inventories of firms will rise.
d. Firms will cut back on their current rate of output.

Question 2

M1 is actually a smaller amount than M2.
a. True
b. False
Indicate whether the statement is true or false