Economics (7th Edition) (What's New in Economics)
7th Edition
ISBN: 9780134738321
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Question
Chapter 19, Problem 19.4.7PA
To determine
Calculation of the level of household spending.
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Use the graph to answer the following questions:
a)what is the value of the MPC?
b)what is the value of the MPS?
U.S. business inventories increase
Business inventories in the United States rose 0.4% in July after no change in the prior month. An increase in inventories adds to gross domestic product while a decrease subtracts from it.
Source: U.S. Department of Commerce, September 13, 2019
Explain why an increase in inventories adds to gross domestic product but why it matters whether an increase in inventories is planned or unplanned.
A planned increase in inventories _______.
A.
decreases investment, which decreases equilibrium expenditure and real GDP
B.
increases investment, which increases equilibrium expenditure and real GDP
C.
shifts the AE curve
upward,
so firms decrease production and real GDP decreases to reach equilibrium expenditure
D.
shifts the AE curve
downward,
so firms decrease production and real GDP decreases
E.
increases consumption expenditure, which increases equilibrium expenditure and real GDP
An unplanned increase…
That part of income which is either consumed or saved
by all the households in an economy is called
Chapter 19 Solutions
Economics (7th Edition) (What's New in Economics)
Ch. 19 - Prob. 19.1.1RQCh. 19 - Prob. 19.1.3RQCh. 19 - Prob. 19.1.4RQCh. 19 - Prob. 19.1.5RQCh. 19 - Prob. 19.1.6PACh. 19 - Prob. 19.1.7PACh. 19 - Prob. 19.1.8PACh. 19 - Prob. 19.1.9PACh. 19 - Prob. 19.1.10PACh. 19 - Prob. 19.1.11PA
Ch. 19 - Prob. 19.1.14PACh. 19 - Prob. 19.2.1RQCh. 19 - Prob. 19.2.2RQCh. 19 - Prob. 19.2.3RQCh. 19 - Prob. 19.2.4PACh. 19 - Prob. 19.2.9PACh. 19 - Prob. 19.2.10PACh. 19 - Prob. 19.3.1RQCh. 19 - Prob. 19.3.2RQCh. 19 - Prob. 19.3.3RQCh. 19 - Prob. 19.3.4PACh. 19 - Prob. 19.3.5PACh. 19 - Prob. 19.3.6PACh. 19 - Prob. 19.3.7PACh. 19 - Prob. 19.3.8PACh. 19 - Prob. 19.3.9PACh. 19 - Prob. 19.3.10PACh. 19 - Prob. 19.4.1RQCh. 19 - Prob. 19.4.3RQCh. 19 - Prob. 19.4.4PACh. 19 - Prob. 19.4.6PACh. 19 - Prob. 19.4.7PACh. 19 - Prob. 19.4.8PACh. 19 - Prob. 19.1RDECh. 19 - Prob. 19.2RDECh. 19 - Prob. 19.6RDECh. 19 - Prob. 19.7RDE
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