28 IfGDP cxceeds agsaresate expeaditures A Saving will exceed planned invest ie

Question

28 IfGDP cxceeds agsaresate expeaditures A Saving will exceed planned invest ie B. Planned invemem will exceed saving Planned investment will exceed actual investment D Injectioas will exceed leakages 29 Over time, an increase in the real output and incomes of the trading partners of the United States will A. Increase UUS exports and U.S. imperts B Decrease t/ S esports and L. S. inport C. Increase U.S. exports and deccase US imports D. Decreasc US exports and inerease L: S imports 30 The amount by which an aggregate expenditures schedule must shift downward to eliminate demand-pull inflation and still achieve the full-employment GDP is an A. Inflationary expenditure gap B Recessionary expenditure gap C. Depreciation rate D. Price-level change 31. A rightward shift of the AD curve in the very steep upper part of the upsloping AS curve will: A. increase real output by more than the price level. B increase the price level by more than real output C. reduce real output by more than the price level D reduce the price level by more than real output

Explanation / Answer

a) "D"

In a situation where the Gdp is more than the expenditure the injection in terms of exports and investment will be more than the leakage i.e. imports and saving.

b) "A"

Increased output will increase the income of people and it will lead to higher imports, similarly, an increase in income of partner nations will increase the exports of the US.

c) "A"

Inflationary expenditure gap.

d) "B"

After reaching the steep point any increase in the Ad will lead to a higher increase in the price and lower increase in the output.

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