Read the two statements and choose the correct option.
I. At equilibrium income, there is no unplanned change in inventories.
II. At equilibrium income, there must be full employment.

Only ICorrect answerYour answerOnly IICorrect answerYour answerBoth I and IICorrect answerYour answerNeither I nor IICorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

At equilibrium, firms sell exactly what they planned to, so stocks change only as planned. I is true.
Keynes showed that equilibrium can come with unemployment. II is false.

Ten questions from Income Determination & the Multiplier, at your own pace.

Ten questions from Income Determination & the Multiplier, at your own pace.

Read the two statements and choose the correct option.I. At equilibrium income, there is no unplanned change in inventories.II. At equilibrium income, there must be full employment.