All of the Following Statements About Equilibrium Expenditure Are True

question 479

Multiple Choice

All of the following statements about equilibrium expenditure are true EXCEPT .

• A) unplanned inventory investment is zero
• B) actual investment is less than planned investment
• C) aggregate planned expenditure equals actual aggregate expenditure
• D) aggregate planned expenditure equals real GDP

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Definitions:

Administrative Expenses

Costs related to the general administration of a business, such as salaries of senior executives, accounting, and human resources, that are not directly tied to any specific business activity.

Period Cost

Expenses recognized in the accounting period when they are incurred, not directly linked to production activity.

Selling

The process of persuading a customer to buy a product or service, often involving identifying customer needs, presenting solutions, and closing the sale.

Factory Overhead

All manufacturing costs that are not directly related to the production of a product or direct labor.