Suppose That in 2013, Firms Discover That Their Inventories Are

question 40

Multiple Choice

Suppose that in 2013, firms discover that their inventories are falling below their planned levels. Which of the following statements is correct?

• A) Aggregate demand is less than aggregate supply.
• B) Even though firms are trying, they are unable to maximize profits.
• C) The level of aggregate savings must equal the level of desired investment.
• D) Real GDP is less than equilibrium expenditure.

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Definitions:

Door-In-The-Face Technique

A persuasion strategy where a large, unreasonable request is first made knowing it will be refused so that a smaller, more moderate request will be accepted.

Sleeper Effect Method

A phenomenon where a message that was initially discounted gains in persuasiveness over time, often due to the dissociation of the message from its source.

Attraction

A force that draws individuals together, leading to friendships, romantic relationships, or other forms of social interaction.

Similarity

The state of being alike or having attributes in common, often used in psychology to explain patterns of grouping in perception and social relationships.