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Please EXPLAIN why have you chose that one. Thank You! True or false and explain why: a} b} a) When aggregate expenditure is greater than
Please EXPLAIN why have you chose that one. Thank You!
True or false and explain why: a} b} a) When aggregate expenditure is greater than aggregate output. there will be an unplanned build-up of inventories. If actual investment is greater than planned investment, unplanned inventories decline. If planned invesunent increases. equilibrium will be restored only when saving has increased by exactly the amount of the initial increase in planned investment, assuming there is no government or foreign sector. When a closed economy without a government is in equilibrium, planned saving equals planned investment. If aggregate expenditure decreases. then equilibrium output increases. Assuming there is no government or foreign sector, the economy will be in equilibrium if, and only if, planned investment equals actual investment. Actual investment equals planned investment plus unplanned changes in inventories. If the MPG is 0.?5, then the multiplier is 4. The larger the MPG, the smaller the multiplier. The paradox of thrift is that all people deciding to save more could lead to them saving lessStep by Step Solution
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