the economics of money, banking, and financial markets

680 #

© 2014 Pearson Canada Inc.#

9. 
   

   In the Keynesian framework, as long as output is below the equilibrium level, unplanned
   inventory investment will remain negative, firms will continue to ____ production, and
   output will continue to ____.
   A) lower; fall
   B) lower; rise
   C) raise; fall
   D) raise; rise
   Answer: D
   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

   
   


10. 
    

    In the Keynesian framework, as long as output is ____ the equilibrium level, unplanned
    inventory investment will remain ____, firms will continue to raise production, and output
    will continue to rise.
    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

    
    


11. 
    

    In the Keynesian framework, as long as output is ____ the equilibrium level, unplanned
    inventory investment will remain ____, firms will continue to lower production, and output
    will continue to fall.
    A) below; negative
    B) above; negative
    C) below; positive
    D) above; positive
    Answer: D
    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

    
    


12. 
    

    An increase in unplanned inventory investment for the entire economy equals the excess of
    ____.
    A) output over aggregate supply
    B) output over aggregate demand
    C) aggregate supply over output
    D) aggregate demand over output
    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