Rahman Practice Questions

In the short run macro model if aggregate expenditure

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Unformatted text preview: the short-run macro model, if aggregate expenditure is less than GDP, output will a. decline as firms cut production to stop the buildup of inventories b. decline as firms increase their prices to stop the buildup of inventories c. increase as firms increase production to try to stop depletion of inventories d. increase as firms cut their prices to try to stop depletion of inventories e. remain unchanged indefinitely unless government takes action ____ 22. In the short-run macro model, if GDP is $5 trillion and aggregate expenditure is $4 trillion, a. GDP will rise because inventories will rise b. GDP...
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