Question

Table 9-1

Output	Consumption	Investment	Net Exports
1000	800	500	100
1500	1200	500	100
2000	1600	500	100
2500	2000	500	100
3000	2400	500	100
3500	2800	500	100
4000	3200	500	100

____   12.   In Table 9-1, the equilibrium level of output is

a.	2,500.
b.	3,000.
c.	3,500.
d.	4,000.

____   13.   In Table 9-1, at output of 4,000, inventories are

a.	decreasing by 200.
b.	increasing by 200.
c.	increasing by 300.
d.	decreasing by 300.

____   14.   In Table 9-1, inventories are being depleted as long as output is below

a.	2,000.
b.	2,500.
c.	3,000.
d.	3,500.

____   15.   In Table 9-1, inventories will be increasing as long as output is above

a.	1,000.
b.	1,500.
c.	2,000.
d.	3,000.

Answer 1

Answer

AE=C+I+NX

Inventories =GDP-AE

Output	Consumption	Investment	Net Exports	AE	Inventories
1000	800	500	100	1400	-400
1500	1200	500	100	1800	-300
2000	1600	500	100	2200	-200
2500	2000	500	100	2600	-100
3000	2400	500	100	3000	0
3500	2800	500	100	3400	100
4000	3200	500	100	3800	200

Q12

Answer

The equilibrium is at AE=output

where

output =3000

Option b

==========

Q13

Answer

output =4000

Inventories =200

Option b

=======

Q14

Answer

Option c

As long as it is below equilibrium output that is 3000

========

Q14

Option d

As long as it is above equilibrium output that is 3000