Anonymous asked in Social ScienceEconomics · 2 months ago

Can you help with an econ question and explain?

If the economy is in equilibrium, it can be argued that:

a) the state budget is balanced;

b) Budgets at all levels must be balanced;

c) consumer spending should be equal to investment;

d) any increase in consumer spending will lead to an inflationary gap

e) firms' income should be equal to gross investment;

f) all previous answers are incorrect.

1 Answer

  • Oiy
    Lv 6
    2 months ago

    The answer is d. The increase in consumer spending will move AD to the right more than the potential level. So it will cause inflation.

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