Fiscal Policy Flashcards
1
Q
What are the examples of physical capital?
A
- buildings & machinery
- new technology
2
Q
What determines equilibrium output?
A
- equ. when planned agg. expenditure equals to agg. output
3
Q
Planned aggregate expenditure equals to … ?
A
AE = C + I
4
Q
If agg. output is > planned expenditure (y > C + I), what happens to stock of products?
A
Increase
