Using the Aggregate Expenditures Model, Which of the Following Occurs

question 51

Multiple Choice

Using the aggregate expenditures model, which of the following occurs if aggregate expenditures exceed real GDP?
I. The economy will expand causing an increase in employment.
II. The economy will experience an inflationary gap.
III. The price level will rise.
IV. Actual investment will be less than planned investment.

• A) I, II, and IV
• B) I, III, and IV
• C) I and IV
• D) I, II, III, and IV

---

Definitions:

Conflict

A struggle or clash between opposing forces, ideas, or interests, either internally within a person or externally between individuals, groups, or nations.

Thomas Nagel

An American philosopher known for his contributions to philosophy of mind, political philosophy, and ethics, particularly famous for the essay "What Is It Like to Be a Bat?".

Bat

A nocturnal, flying mammal, capable of echolocation, belonging to the order Chiroptera, known for their role in pollinating plants and controlling insect populations.

Understand

The ability to grasp the meaning, significance, or nature of something.