and the total wiltl be counted out of 100 Page 11 out of 17 tise the below graph
ID: 1130284 • Letter: A
Question
and the total wiltl be counted out of 100 Page 11 out of 17 tise the below graph to answer the 3 following questions per year) 5800 2000 Real GDP (per year) $2) At the level of real GDP that is larger than $2,000, aggregate expenditures are less than real GDP b) more than real GDIP c) equal to real GDIP d) equal to household consumption 53) If real GDP is less than aggregate expenditures, unplanned change in inventories will a) increase b) decrease c) be unchanged 54) What is likely to happen if unplanned inventories increase? a) b) c) d) Firms will increase production, which will increase real GDP Firms will decrease production, which will reduce real GDP Aggregate expenditures will increase Aggregate expenditures will decrease Suppose you deposit $10,000 into your checking account at Intermational Bank. Further, assume that the required reserve ratio is 10%. International Bank Assets Liabilities Change in reserves Change in deposits Change in loans 55)[MB.cl How does your deposit impact reserves of the International Bank? a +$10,000 b) -$10,000 c) +$1,000 d)-$1,000Explanation / Answer
Answer 52 - On the basis of given figure, at the level of real GDP larger than $2000, aggregate expenditure is less than real GDP. It can be seen in the diagram that AE curve lies below the 45* line which Y=AE.
Option A is the correct answer
Answer 53 - If real GDP is less than aggregate expenditure, unplanned change in inventories will decrease. Once GDP reached to its potential level inventories will increase in AE< 45* line.
Option B is the correct answer.
Answer 54 - The firms will decrease production, if unplanned inventories increase. By doing these firms reduces real GDP in the country. Again equilibrium level of output will be maintained.
Option B is the correct answer.
Answer 55 - A consumer deposits $10,000 in his bank account in International Bank. Required Reserve ratio is 10%. It means,
RR = (10,000 * 10) / 100
Required Reserve = $1000
Reserves of International bank will increase by $1000.
Option C is the correct answer.
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