Suppose real GDP is at 1,500, which of these will occur? Planned $4,000 Supply 45-degree line aggregate spending, AEPlanned (billions of dollars) AEplanned 3,000 Demand 2,000 1,400 1,000 800 $500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Real GDP (billions of dollars) Inventory shrinks, so firms reduce output. Inventory shrinks, so firms increase output. Inventory grows, so firms reduce output. Inventory grows, so firms increase output. O O

Suppose real GDP is at 1,500, which of these will occur? Planned $4,000 Supply 45-degree line aggregate spending, AEPlanned (billions of dollars) AEplanned 3,000 Demand 2,000 1,400 1,000 800 $500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Real GDP (billions of dollars) Inventory shrinks, so firms reduce output. Inventory shrinks, so firms increase output. Inventory grows, so firms reduce output. Inventory grows, so firms increase output. O O

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Production And Growth

Section: Chapter Questions

Problem 5CQQ

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