The 45-degree reference line indicates all points at which
A. planned real saving and planned real saving are equal.
B. planned real consumption expenditures and planned real saving are equal.
C. planned real consumption expenditures and real GDP are equal.
D. planned real saving and planned real investment are equal.
Answer: C
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With crises caused by macroeconomic imbalances,
A) it is usually difficult to avoid a recession. B) austerity programs are not needed. C) expansionary policies can be used to correct the crisis. D) the money supply should be increased.
Equilibrium in the market for funds occurs when the
a. lenders and borrowers are mutually satisfied at some interest rate. b. marginal revenue product of investment using the funds equals the interest rate. c. demand curve for funds and the supply curve for funds intersect. d. All of the above are correct.