3. Drag the correct word/phrase to each sentence.

If total expenditures (TE) are less than total production (TP), then inventories are above theirlevels, leading firms to cut back on production.

If TE = TP, then firms neither increase nor decrease.

If the marginal propensity to save (MPS) is 0.20, then the marginal propensity to consume (MPC) is.

models hold that is sometimes in the best interest of business firms to pay their employees wage rates that arethan the equilibrium wage rate.

Keynesian economists hold that the economy is always self-regulating. True or false?

Fill in the blanks with words that would best complete the passage.

8.75productionoptimumtrue0.80lowerefficiency wagehigherfalse