When spending falls short of output, additional inventories are created
a. True
b. False
Indicate whether the statement is true or false
True
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The fiscal and monetary policy alternative to fine-tuning is
A) abandonment of both fiscal and monetary policy. B) abandonment of fiscal policy in favor of exclusive reliance on monetary policy. C) budgets established for the long term and a steady growth rate for the money stock. D) price and wage controls. E) redistribution of income in favor of those with a higher propensity to spend.
Refer to Figure 28-2. Suppose the economy is at point A in the figure above. Which of the following is true?
A) Actual inflation is 1%. B) The economy will move from A to B. C) The expected rate of inflation is 5.5%. D) The current unemployment rate is 3.8%. E) The current unemployment rate is equal to the natural rate of unemployment.