The creation of unwanted inventories or the depletion of wanted inventories signals coming changes in the level of national income. Explain.
Answer to relevant QuestionsWhat effect would an upward shift in the investment curve have on the equilibrium level of national income? Fill in the missing cells for C, S, and I in the following table, given that autonomous consumption = $100, MPC = 0.50, and intended investment = $150. Indicate whether the economy is in equilibrium. Who are discouraged workers? Underemployed workers? Are they counted as part of the labor force? As part of the unemployed? How does the BLS determine who is unemployed? Real business cycle theory is not a theory about cycles. Explain. What is meant by technological change? How does it affect labor productivity? Give an example.
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