If Aggregate Planned Expenditure Exceeds Real GDP

question 61

Multiple Choice

If aggregate planned expenditure exceeds real GDP,

• A) actual inventories decrease below their target.
• B) planned investment is greater than planned savings.
• C) firms are not maximizing their profits.
• D) planned consumption expenditure is less than actual consumption expenditure.

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Definitions:

Profits

The financial gain realized when the revenues generated from business activities exceed the expenses, costs, and taxes associated with sustaining the operation.

Market Share

The portion of a market controlled by a particular company or product, typically expressed as a percentage of total sales in that market.

Employee Welfare

The range of services and benefits provided by an employer to promote the well-being of employees.

Social Responsibility

The ethical framework suggesting that individuals and organizations have an obligation to act for the benefit of society at large.