Use the Figure Above to Answer This Question

question 69

Multiple Choice

Use the figure above to answer this question. At a price level of of 90,

• A) inventories increase and firms will increase production.
• B) the aggregate quantity demanded exceeds real GDP and inventories will decrease.
• C) people will be forced to cut consumption so that aggregate demand will decrease.
• D) the aggregate quantity demanded exceeds real GDP, inventories increase and the price level will rise.

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Definitions:

Liability

A financial obligation or amount owed by a business to creditors, typically reflected on the balance sheet.

Fiscal Year

A 12-month period used for accounting purposes and preparing financial statements, which may not coincide with the calendar year.

Supplies Account

An account used to track the cost of supplies bought and used by a business over a period.

Supplies Expense

Supplies expense refers to the cost of consumable supplies used during an accounting period, recognized as an expense on the income statement.