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Assume We Are at an Income Level Where the C+I+G+X

Question 7

Multiple Choice

Assume we are at an income level where the C+I+G+X (consumption+investment+government spending+net exports) function lies above the 45-degree line.We can conclude that at this income level:


A) unplanned inventories are likely to accumulate.
B) the economy is in equilibrium.
C) households will save more money than they spend.
D) aggregate expenditures are less than output.
E) there will be pressure to expand production.

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