Which of the following is correct? When actual leakages exceeds expected injections, then:
a. Inventories rise, unemployment tends to rise, and prices tend to fall.
b. Inventories rise, unemployment tends to fall, and prices tend to rise.
c. Inventories fall, unemployment tends to rise, and prices tend to rise.
d. It is impossible for these two to be unequal.
e. You are mixing apples and oranges. These two macroeconomic variables should not be compared.
.E
You might also like to view...
An economy in which output has decreased and prices have decreased would suggest a:
A. decrease in short-run aggregate supply. B. increase in aggregate demand. C. increase in short-run aggregate supply. D. decrease in aggregate demand.
Over the past decade, a nation's real Gross Domestic Product (GDP) grew at a constant rate of 9 percent per year while its population grew 8 percent annually. Forecasters predict that during the coming decade, real GDP will continue to grow 10 percent annually, but the population growth rate is expected to drop to 7 percent annually. If the forecasters are correct, which of the following will be TRUE?
A. The annual rate of growth of per capita real GDP will increase from 1 percent to 3 percent. B. The annual rate of growth of per capita real GDP will decline from 2 percent to 1 percent. C. The annual rate of growth of per capita real GDP will increase from 1 percent to 8 percent. D. The annual rate of growth of per capita real GDP will decline from 3 percent to 2 percent.