Answer to Question #12959 in Macroeconomics for Rachel

Question #12959
Explain why it is not a sustainable policy to attempt to keep unemployment below its natural level according to the augmented Phillips Curve model? Are the following statements true or false? 1. Aggregate demand is the sum of total domestic spending by private sector. 2. Consumer spending is an injection in the circular flow of income and spending. 3. The typical value for the MPC is less than 1.0. 4.The slope of the consumption function is measured by the marginal prospensity to save. 5. To economists, investment means buying stocks and bonds 6. If the economy is suffering a recession, inventories are probably falling. 7. Producers will change their prices when GDP is at the equilibrium level. 8. When income rises, total expenditures remain constant. 9. Equilibrium is the point where total spending equals total output, or GDP. 10. Economic growth is the same as economic developmet.
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