If total production (TP) is greater than total expenditures (TE), it follows that
A) producers have produced more than individuals buy.
B) optimum inventory levels rise.
C) firms have underproduced.
D) actual inventory levels unexpectedly rise.
E) a and d
E
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If national saving (S) is $100,000, net taxes (T) equal $100,000 and government expenditure (G) is $25,000, how much are households and businesses saving?
A) $25,000 B) $225,000 C) -$25,000 D) none of the above
Persistence is
A) the tendency for declines in economic activity to be followed by further declines, and for growth in economic activity to be followed by more growth. B) the idea that the standard pattern of contraction—trough—expansion—peak occurs again and again in industrial economies. C) the tendency of many economic variables to move together in a predictable way over the business cycle. D) the idea that peaks and troughs of the business cycle occur at regular intervals.