In the most basic model presented in the text, when aggregate expenditures cross the 45-degree line,
a. saving equals intended investment
b. saving is greater than intended investment
c. saving is less than intended investment
d. saving equals consumption
e. saving equals inventories
A
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Using the aggregate expenditures model, if aggregate expenditures (aggregate demand) is $10 trillion and aggregate output is $10.3 trillion:
a. businesses will accumulate inventories, and output will decline. b. real output will increase if the full-employment capacity of the economy is greater than $10.3 trillion. c. inflation will be a problem if the full-employment capacity of the economy exceeds $10.3 trillion. d. both b and c are correct.
Points that lie inside (or below) the PPF are
A) unattainable. B) attainable and productive efficient. C) attainable but productive inefficient. D) attainable and neither productive efficient nor productive inefficient.