In the Aggregate Expenditures Model, in Equilibrium

question 10

Multiple Choice

In the aggregate expenditures model, in equilibrium,

• A) consumption equals investment.
• B) unplanned inventory changes equal zero.
• C) inventory changes equal investment.
• D) aggregate expenditures equal consumption.

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Definitions:

Limited Liability

A legal structure that limits the personal financial responsibility of shareholders, partners, or owners for company debts and obligations.

Common Stock

Equity ownership in a corporation, with voting rights and the potential to receive dividends.

Petroleum

A natural resource that consists of a complex mixture of hydrocarbons and is used primarily as fuel and in the production of chemicals.

GDP

Gross Domestic Product, the total value of all goods and services produced within a country in a specific time period, representing the size of its economy.