In the Keynesian model, whenever planned investment is less than planned saving
A. there will be an unplanned inventory decrease, and real GDP will eventually increase.
B. the amount of planned investment will decrease, and real GDP will decrease.
C. the amount of planned investment will decrease, and real GDP will remain unchanged.
D. there will be an unplanned inventory increase, and real GDP will eventually decrease.
Answer: D
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Taxes add to and transfers subtract from the flow of income and spending
a. True b. False Indicate whether the statement is true or false
The marginal productivity principle implies that
a. quantity demanded of an input normally declines as the input price falls. b. at equilibrium, profit from the last unit of input will be zero. c. for maximizing profit, marginal revenue product should be greater than price. d. marginal productivity of inputs increase when price of inputs increase.