Chap-9-assignment - ECON201-Chap- 9 Questions Multiple...

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ECON201-Chap- 9 Questions Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. When constructing a basic macroeconomic model, several assumptions (not realistic, but necessary to simplify the analysis) are made. Which of the following are assumed to be constant? a. the price level b. the rate of interest c. the foreign exchange rate d. the level of government spending e. All of the above are held constant. ____ 2. By definition, total production must always equal total a. sales. b. demand. c. purchases. d. income. ____ 3. At the equilibrium level of income it must be true that total a. income equals total spending. b. product equals total output. c. output equals total inventory. d. income equals total saving. ____ 4. If total spending exceeds total output, then a. inventory levels will rise. b. inventory levels will remain constant. c. inventory levels will fall. d. output will eventually decrease. ____ 5. If inventory levels are decreasing, then we should expect business firms to a. decrease prices. b. decrease output. c. lay off workers. d. increase output. ____ 6. When businesses are cutting back production, then it probably true that a. total spending is greater than total output. b. total output is greater than total income. c. total spending is less than total output. d. inventory levels are decreasing. Figure 9-1 1
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____ 7. In Figure 9-1, at $3,000 billion real GDP, a. spending exceeds total output and inventories will fall. b. inventories are rising. c. aggregate demand equals aggregate supply. d. spending falls short of output and inventories will rise. ____ 8.
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This homework help was uploaded on 04/01/2008 for the course ECON 201 taught by Professor Dewan during the Spring '08 term at Eastern Michigan University.

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Chap-9-assignment - ECON201-Chap- 9 Questions Multiple...

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