Question: True or False 1 In the aggregate expenditure model when inventories

True or False:
1. In the aggregate expenditure model, when inventories fall below desired levels, output will rise.
2. When output is less than aggregate expenditures, output will fall.
3. The greater is savings, for a given level of income, the greater is aggregate expenditures.
4. If investment, government purchases, and net exports are autonomous, the aggregate expenditures curve will have the same slope as the consumption function.
5. Planned investment is sensitive to firms’ perceptions about the future.
6. If businesspeople are confident that the economy will be good in the future, output tends to increase.
7. When unplanned inventory investment is negative, output will tend to fall.
8. Increasing planned investment would tend to increase output, but positive unplanned inventory investment would tend to decrease output.

  • CreatedFebruary 07, 2013
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