Introduction to Economics 2 Deneme Sınavı Sorusu #349546
Based on the aggregate expenditure function in the chart, at an income level of 600 liras, what is the relationship among planned expenditures, income and stocks?
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Since planned aggregate expenditures are greater than income, stocks decrease
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Since planned aggregate expenditures are greater than income, stocks increase
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Since planned aggregate expenditures are less than income, stocks decrease
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Since planned aggregate expenditures are less than income, stocks increase |
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Since planned aggregate expenditures are equal to income, stocks do not change |
Aggregate expenditures are higher than GDP in the income levels when AE function is above the 45° line. In this case, the GDP will change towards the equilibrium level and when the equilibrium point is reached, the change will end. Unexpected (unplanned) stock change values are negative in income levels below 1,000 TL in the figure. These negative values represent the decrease in stocks. Production will increase to replace this decline in stocks. Thus, GDP will change in the direction of increase.
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