If real GDP is greater than planned aggregate spending:
A. real GDP will fall.
B. unplanned inventory investment is negative.
C. real GDP will rise.
D. the economy is in equilibrium.
A. real GDP will fall.
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The marginal product of capital (MPK) is given by the ________
A) capital share of income + average output per unit of capital B) capital share of income - average output per unit of capital C) capital share of income ÷ average output per unit of capital D) capital share of income × average output per unit of capital E) none of the above
Suppose the Fed increases the money supply. As a result of this, people deposit excess funds into their bank accounts, causing banks to have excess reserves
As a result, the banks lower the interest rates that they charge on loans, and investment rises, causing an increase in aggregate spending. This is known as a(n) A) direct effect of monetary policy. B) indirect effect of monetary policy. C) direct effect of fiscal policy. D) indirect effect of fiscal policy.