Chapter9 ReviewQuestions

Chapter9 ReviewQuestions - ECN 211 Fall Semester 2010...

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ECN 211, Fall Semester, 2010 Review Questions Chapter 9 ____ 1. In the aggregate expenditures (Keynesian) model, if an economy is currently producing a level of output below the equilibrium GDP there will be: a. unplanned inventory depletion. b. unplanned inventory accumulated. c. a decrease in GDP. d. a decrease in employment. Exhibit 9-4 Keynesian aggregate expenditures-output model ____ 2. In Exhibit 9-4, equilibrium GDP is: a. $500 billion. b. $800 billion. c. $1,000 billion. d. $2,000 billion. ____ 3. At a current (not necessarily equilibrium) GDP of $500 billion in Exhibit 9-4, the economy will experience unplanned inventory: a. depletion of $100 billion. b. depletion of $250 billion. c. accumulation of $100 billion. d. accumulation of $250 billion. ____ 4. When the current (not necessarily equilibrium) GDP is $1,500 billion in Exhibit 9-4, the economy will experience unplanned inventory: a. accumulation of $250 billion. b. accumulation of $700 billion. c. depletion of $700 billion. d. depletion of $500 billion.
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Exhibit 9-1 GDP and consumption data GDP Consumption Aggregate Expenditures Unplanned inventory $0 $0.5 1 1.0 2 1.5 3 2.0 4 2.5 5 3.0 6 3.5 7 4.0 8 4.5 ____ 5. As shown in Exhibit 9-1, if investment is $0.5 trillion, government spending is $1 trillion, net exports are -$0.5 trillion, and actual (not necessarily equilibrium) GDP is $7 trillion, then: a. inventory depletion is -$1.0 trillion. b. inventory accumulation is $1.0 trillion. c. inventory depletion is -$2.0 trillion. d.
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Chapter9 ReviewQuestions - ECN 211 Fall Semester 2010...

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