Which of the following statements is correct for the case of a simple economy without government or external sectors?Group of answer choicesA position of equilibrium would require that there should be no unplanned changes in inventories or incentive for producers to alter output.The phrase “supply adapts to demand” is another way of saying that planned saving determines planned investment.According to the national accounts, planned saving and planned investment need not be equal and nor should actual saving and actual investment necessarily be equal, regardless of whether or not the economic system is in equilibrium.Macroeconomic equilibrium is a situation where plans of consumers and producers are realized but output is always equal to aggregate planned expenditure regardless of whether or not the economic system is in equilibrium.

Adding an external sector to the Keynesian income-expenditure model implies that for equilibrium, in terms of leakages and injectionsGroup of answer choicesplanned saving cannot not be equal to planned investment if the sum of taxation and imports is diiferent from the sum of government expenditure and exportsplanned saving must equal planned investment but the budget balance and/or the trade balance cannot be equal to zeroit is not necessary for planned saving and planned investment to be equal but exports must be equal to importsit is not necessary for planned saving and planned investment to be equal but if they are unequal then either the budget or the trade balance must be equal to zero.

Consider a simple economy with no government or external sector. Assume that in this economy the consumption (and thus saving) plans of households are always realized. Assume for the current period this economy is characterized by the following data:Y = 2800, Cp = 1800 and Ip = 400where Y is output, Cd is consumption and Ip is planned investment. In this caseGroup of answer choicesoutput is at its equilibrium level but planned saving and planned investment are unequalaggregate planned expenditure is greater than outputtotal investment recorded in the national accounts would be 1000output is not at its equilibrium level and total investment will be smaller than planned investment.

In the Keynesian income-expenditure model, equilibrium income is necessarily equal to a multiple ofGroup of answer choicesthe exogenous component of planned aggregate expenditure which is partly dependent on the autonomous component of taxation when government is includedthe autonomous component of consumption, regardless of whether the economy is closed or openthe sum of investment, government expenditure and net exportsnone of the other alternatives are correct.

If planned aggregate expenditure is less than total production, then: a. the economy is in equilibrium. b. GDP will increase. c. firms will experience an unplanned increase in inventories. d. actual inventories will equal planned inventories.

In the basic Keynesian model, all statements below except for one are true. Which is the incorrect statement? Group of answer choicesPlanned aggregate expenditure is always equal to output in equilibrium. Planned government spending always equals actual government spending.Planned net exports always equal actual net exports.Planned investment always equals actual investment.Planned consumption always equals actual consumption.