For this problem, assume exports equal zero and that firms did not purchase any plant or equipment in the years specified. Suppose in the year 2015, firms in this this country produced 4,000 million widgets, all of which they planned on selling. (In other words, firms were not planning on any changes to their inventories.) Of those 4,000 million widgets, households purchased 3,000 million, and government purchased 750 million. In 2015, what was the relationship between actual expenditures and the amount of output (widgets) produced? All else equal, what will firms likely do in the following year?
For this problem, assume exports equal zero and that firms did not purchase any plant or equipment in the years specified. Suppose in the year 2015, firms in this this country produced 4,000 million widgets, all of which they planned on selling. (In other words, firms were not planning on any changes to their inventories.) Of those 4,000 million widgets, households purchased 3,000 million, and government purchased 750 million. In 2015, what was the relationship between actual expenditures and the amount of output (widgets) produced? All else equal, what will firms likely do in the following year?
Chapter19: Measuring Economic Performance
Section: Chapter Questions
Problem 6P
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For this problem, assume exports equal zero and that firms did not purchase any plant or equipment in the years specified.
Suppose in the year 2015, firms in this this country produced 4,000 million widgets, all of which they planned on selling. (In other words, firms were not planning on any changes to their inventories.) Of those 4,000 million widgets, households purchased 3,000 million, and government purchased 750 million.
- In 2015, what was the relationship between actual expenditures and the amount of output (widgets) produced?
- All else equal, what will firms likely do in the following year?
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