Suppose investment is equal to $950 billion, purchases of newly produced capital goods is $670 billion, and changes in business inventories is -$120 billion. What does purchases of new residential housing equal?

"Expansionary fiscal policy is always 100 percent effective when the short-run aggregate supply curve is horizontal." Is this statement TRUE?

A) yes, because theoretically nothing else can offset the effects of fiscal policy B) yes, when the long-run aggregate supply curve is horizontal too C) no, because crowding out could take place D) no, because the increased spending may cause the price level to increase

A change in one input price will cause the slope of the budget line to change

a. True b. False Indicate whether the statement is true or false