Consumption is $5 million, planned investment spending is $8 million, government purchases are $10 million, and net exports are equal to $2 million. If GDP during that same time period is equal to $27 million, what unplanned changes in inventories occurred?
a. There was an unplanned increase in inventories equal to $2 million.
b. There was no unplanned change in inventories.
c. There was an unplanned decrease in inventories equal to $2 million.
d. There was an unplanned decrease in inventories equal to $19 million.
a. There was an unplanned increase in inventories equal to $2 million.
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If neither the demand nor supply of a good is perfectly elastic or inelastic, a tax on the good ________ consumer surplus and ________ producer surplus
A) decreases; decreases B) increases; increases C) decreases; increases D) increases; decreases E) decreases; does not change
For an economy starting at potential output, an increase in investment in the short run results in a(n):
A. recessionary output gap. B. increase in potential output. C. expansionary output gap. D. decrease in potential output.