The Lucas Wedge shows
A) the negative impact inflation has on consumer spending.
B) whether a country needs to slow its real GDP growth rate.
C) the positive impact lower taxes have on real GDP.
D) the negative impact a slowdown in real GDP growth has on potential GDP.
E) the increased impact of government spending on real GDP.
D
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If aggregate planned expenditure exceeds real GDP, then
A) unplanned inventory changes are positive. B) real GDP will decrease. C) aggregate planned expenditure must decrease to restore the equilibrium. D) planned inventory changes must be negative. E) unplanned inventory changes are negative.
A firm sells 30 units of its product at a price of $5 per unit. It incurs a fixed cost of $100 and a variable cost of $20. The firm's profit is:
A) $30. B) $50. C) $100. D) $150.