Assume that inventories declined by more than analysts predicted. This implies that
A) planned aggregate expenditure was less than real GDP.
B) planned aggregate expenditure is unrelated to real GDP.
C) planned aggregate expenditure was greater than real GDP.
D) planned aggregate expenditure was equal to real GDP.
C
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As discussed in the Case in Point on the size of the fiscal multiplier, a study conducted by Jonathan Parker on the effect of fiscal policy during recessions suggests that
A) the multiplier effect of fiscal policy is much less than that for monetary policy. B) temporary fiscal policy financed through government borrowing implies a multiplier value between 0.8 and 1.5. C) fiscal policy has little effect on the economy and that the multiplier value is effectively zero. D) statistical models are inadequate to determine the multiplier and the multiplier value likely varies based on the state of the economy.
Output prices are irrelevant for a firm as it is calculating its cost curves.
Answer the following statement true (T) or false (F)