If the current price level is lower than the equilibrium price level, then it must be true that total planned
A) government spending is less than total planned tax revenues.
B) government spending exceeds total planned tax revenues.
C) real expenditures are less than total planned production.
D) real expenditures exceed total planned production.
D
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AA Appliances sells refrigerators. In 2015 it added $100,000 to its inventory. $10,000 of this addition was from used refrigerators, and the remaining $90,000 was from their purchases of newly manufactured refrigerators. How much of AA's inventory is included in 2015 GDP?
a. $0 b. $10,000 c. $90,000 d. $100,000
Assume the price of capital falls relative to the price of labor and, as a result, the demand for labor increases. Therefore:
A. capital is very highly substitutable for labor. B. the output effect is greater than the substitution effect. C. the income effect is greater than the output effect. D. the substitution effect is greater than the output effect.