Figure 9-3
?
In Figure 9-3, at $3,000 billion GDP,
A. inventories will be falling, signaling businesses to decrease production.
B. inventories will be falling, signaling businesses to increase production.
C. planned saving increases planned investment.
D. inventories will be accumulating, signaling businesses to increase production.
Answer: B
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Foreign exchange arbitrage refers to:
a. the simultaneous purchase and sale of a foreign currency asset in different markets to take advantage of a price differential. b. actions taken to lower currency trading risks and make the markets safer. c. the forgiving of penalties and other punishments for illegal foreign exchange activities. d. government purchases or sales of a nation's own currency in international markets to change or stabilize the value of the currency.
Some economists argue that policymakers can use monetary and fiscal policy to reduce the severity of economic fluctuations. What are some things policymakers can do to boost the economy when aggregate demand is inadequate to ensure full employment?