If Aggregate Planned Expenditure Is Less Than Real GDP Then

question 107

Multiple Choice

If aggregate planned expenditure is less than real GDP then

• A) firmsʹ inventories will decrease and real GDP will decrease as production falls.
• B) consumers increase their planned expenditure until aggregate planned expenditure increases to equal real GDP.
• C) firms increase their planned expenditure until aggregate planned expenditure increases to equal real GDP.
• D) firmsʹ inventories will increase and real GDP will decrease as production falls.

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Definitions:

Treasurer

The executive in charge of external financing in most companies. The treasurer generally reports to the CFO.

Finance Department

The division within an organization responsible for managing its financial activities, including planning budgets, tracking cash flow, and analyzing financial statements.

Large Corporation

A significantly sized company typically characterized by vast operations, substantial revenues, and a large number of employees.

Financial Asset

An intangible asset representing a legal claim to future payment, such as stocks, bonds, or bank deposits.