This table shows some information on a private closed economy. Recall that a private closed economy...

 

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This table shows some information on a private closed economy. Recall that a private closed economy is one that does not have a government and does not trade with the rest of the world. Therefore, the only components of aggregate expenditure are consumption (C) and planned investment spending (Ig). In this problem, assume that planned investment spending is independent of the economy's real GDP level. Also note that real GDP is equal to disposable income in a private closed economy. Unplanned Changes Tendency of I7ITTT Real GDP Consumption Saving Investment Aggregate Expenditure in Inventories Output 1. 300 265 35 60 -25 2. 400 60 60 400 3. 500 415 60 475 4. 600 490 110 60 550 565 135 60 625 75 Using the numbers provided in the table, enter the missing numbers in the empty cells. Then, using the drop-down selection menus in the right-most column, indicate whether output will tend to rise, fall, or remain in equilibrium at each level of real GDP in the table. Note that the table uses negative numbers to indicate an unplanned decrease in inventories and positive numbers to indicate an unplanned increase in inventories. True or False: A fundamental assumption behind the aggregate expenditure model is that prices in the economy are fixed. False True When aggregate expenditure is less than real GDP, there is an unplanned in business inventories. This unplanned change in inventories will cause the actual level of investment to be than the planned level of investment (Ig), which will prompt firms to employment and production. This table shows some information on a private closed economy. Recall that a private closed economy is one that does not have a government and does not trade with the rest of the world. Therefore, the only components of aggregate expenditure are consumption (C) and planned investment spending (Ig). In this problem, assume that planned investment spending is independent of the economy's real GDP level. Also note that real GDP is equal to disposable income in a private closed economy. Unplanned Changes Tendency of I7ITTT Real GDP Consumption Saving Investment Aggregate Expenditure in Inventories Output 1. 300 265 35 60 -25 2. 400 60 60 400 3. 500 415 60 475 4. 600 490 110 60 550 565 135 60 625 75 Using the numbers provided in the table, enter the missing numbers in the empty cells. Then, using the drop-down selection menus in the right-most column, indicate whether output will tend to rise, fall, or remain in equilibrium at each level of real GDP in the table. Note that the table uses negative numbers to indicate an unplanned decrease in inventories and positive numbers to indicate an unplanned increase in inventories. True or False: A fundamental assumption behind the aggregate expenditure model is that prices in the economy are fixed. False True When aggregate expenditure is less than real GDP, there is an unplanned in business inventories. This unplanned change in inventories will cause the actual level of investment to be than the planned level of investment (Ig), which will prompt firms to employment and production.

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Anwer Given that thit table shoug some information private closed exonony on a Recall t... View the full answer