Use the Following to Answer Questions

question 2

Multiple Choice

Use the following to answer questions .
Exhibit: Aggregate Expenditures (AE) in a Simplified Economy

-(Exhibit: Aggregate Expenditures (AE) in a Simplified Economy) Consider a simple economy that is made up of only two sectors, households and firms, and that investment is autonomous. Further, disposable personal income = real GDP. Suppose that actual real GDP in this economy is $300 billion in a particular period. We would expect to see

• A) unintended reductions in inventory, planned investment will exceed actual investment.
• B) unintended reductions in inventory, planned investment will be less than actual investment.
• C) unintended increases in inventory, planned investment will exceed actual investment.
• D) unintended increases in inventory, planned investment will be less than actual investment.

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Definitions:

Independent Contractors

Individuals who provide goods or services under terms specified in a contract or within a verbal agreement, not considered employees.

Agents

Individuals or entities authorized to act on behalf of another person or entity in business transactions or legal matters.

Commodities Market

A marketplace where traders buy and sell raw physical products such as gold, oil, or agricultural products.

Ownership

The legal right or status of having control over property, resources, or assets.