the economics of money, banking, and financial markets

678 #

© 2014 Pearson Canada Inc.#

22.3 Goods Market Equilibrium

1. 
   

   If unplanned investment is positive, firms will ____ production and output will
   ____.
   A) cut; rise
   B) cut; fall
   C) increase; rise
   D) increase; fall
   Answer: B
   Diff: 2 Type: MC Page Ref: 546 - 547
   Skill: Applied
   Objective List: 22.1 Utilize the Keynesian cross model for the determination of aggregate output

   
   


2. 
   

   If unplanned investment is negative, firms will ____ production and output will
   ____.
   A) cut; rise
   B) cut; fall
   C) increase; rise
   D) increase; fall
   Answer: C
   Diff: 2 Type: MC Page Ref: 546 - 547
   Skill: Applied
   Objective List: 22.1 Utilize the Keynesian cross model for the determination of aggregate output

   
   


3. 
   

   In the Keynesian framework, as long as output is below the equilibrium level, unplanned
   inventory investment will remain ____ and firms will continue to ____ production.
   A) negative; lower
   B) negative; raise
   C) positive; lower
   D) positive; raise
   Answer: B
   Diff: 2 Type: MC Page Ref: 546 - 547
   Skill: Applied
   Objective List: 22.1 Utilize the Keynesian cross model for the determination of aggregate output

   
   


4. 
   

   In the Keynesian framework, as long as output is ____ the equilibrium level, unplanned
   inventory investment will remain ____ and firms will continue to raise production.
   A) below; negative
   B) above; negative
   C) below; positive
   D) above; positive
   Answer: A
   Diff: 2 Type: MC Page Ref: 546 - 547
   Skill: Applied
   Objective List: 22.1 Utilize the Keynesian cross model for the determination of aggregate output