When we compare PAE and actual output (Y) the macroeconomic variable we generally use to directly assess their equivalence is:
A) unemployment.
B) interest rates.
C) inventories.
D) capital expenditure.

Question

Quizplus · Accepted Answer

The macroeconomic variable we generally use to directly assess the equivalence of PAE and actual output is inventories. If actual output is less than PAE, it indicates that inventories have accumulated, which could lead to lower production and employment in the future. If actual output is greater than PAE, it indicates that inventories are declining, which could lead to higher production and employment in the future. Therefore, inventory levels are an important indicator of the relationship between PAE and actual output.

When We Compare PAE and Actual Output (Y) the Macroeconomic