Refer to the scenario above. Using 2013 as the base year, what is the real GDP of the economy in 2012?

The problem of lags suggests that monetary policy should

A) respond swiftly to statistical reports of economic conditions in the recent past. B) respond to conditions expected to exist in the future. C) stagger its implementation of policies so that there will be an ongoing effect on the economy. D) not respond to changing economic conditions in the economy but instead rely on the economy's self correcting mechanism.

What would happen in an economy if total planned production exceeded total planned real expenditures?

A) Inventories would be depleted, and firms would tend to lower prices. B) Inventories would accumulate, and firms would tend to lower prices. C) Inventories would be depleted, and firms would tend to raise prices. D) Inventories would accumulate, and firms would tend to raise prices.