Figure 13-6 -Refer to Figure 13-6. Let Y = Real GDP, AE

question 194

Multiple Choice

Figure 13-6
-Refer to Figure 13-6. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, JI_P = Planned Investment, G = Government Purchases. Further, I_P and G are autonomous. If real GDP produced is $4,000,

• A) consumers and firms would demand more than was produced.
• B) the economy experiences an inflationary gap.
• C) firms will experience unplanned inventories accumulation.
• D) the price level must rise to reduce aggregate expenditures and restore equilibrium.

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Definitions:

Cash Disbursements

Refers to the outflow of cash to pay for expenses or investments made by a company or individual.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services delivered but not yet paid for.

Budgeted Sales

Budgeted sales are the projected amounts of revenue a company anticipates earning from the sale of goods or services during a specific period, forming a key part of financial planning.

Customer Amounts

Sums of money owed by customers to a business, typically arising from the purchase of goods or services on credit.