Refer to the information provided in Table 8.10 below to answer the questions that follow.
Table 8.10
-Refer to Table 8.10. Which of the following statements is false?
A) At an output level $2,000, there is a $200 million unplanned inventory decrease.
B) If aggregate output equals $2,000 million, then aggregate saving equals $700 million.
C) The MPC for this economy is 0.75.
D) At an output level of $3,600 million, there is a $200 million unplanned inventory increase.

Question

Refer to the information provided in Table 8.10 below to answer the questions that follow.
Table 8.10 
-Refer to Table 8.10. Which of the following statements is false?
A) At an output level $2,000, there is a $200 million unplanned inventory decrease. 
B) If aggregate output equals $2,000 million, then aggregate saving equals $700 million. 
C) The MPC for this economy is 0.75. 
D) At an output level of $3,600 million, there is a $200 million unplanned inventory increase.

Quizplus · Accepted Answer

Based on the table, at an output level of $2,000 million, there is an unplanned inventory decrease of $200 million (statement A is true). The MPC can be calculated as the change in consumption over the change in income, which is $375/$500 = 0.75 (statement C is true). However, there is no information in the table provided to calculate aggregate saving, so statement B is false. Finally, at an output level of $3,600 million, there is an unplanned inventory increase of $200 million (statement D is true).

Refer to the Information Provided in Table 8