Which of the following statements is/are true? If aggregate expenditure is equal to total income, this means i. nothing, because they are always equal by definition. ii. the economy is in equilibrium because people are spending all they desire to spend. iii. inventories will remain at their planned levels. iv. investment will decrease to run down inventories. v. investment will increase to build up inventories.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Which of the following statements is/are
true? If aggregate expenditure is equal to
total income, this means
i. nothing, because they are always equal
by definition.
ii. the economy is in equilibrium because
people are spending all they desire to
spend.
iii. inventories will remain at their planned
levels.
iv. investment will decrease to run down
inventories.
v. investment will increase to build up
inventories.
Transcribed Image Text:Which of the following statements is/are true? If aggregate expenditure is equal to total income, this means i. nothing, because they are always equal by definition. ii. the economy is in equilibrium because people are spending all they desire to spend. iii. inventories will remain at their planned levels. iv. investment will decrease to run down inventories. v. investment will increase to build up inventories.
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