If Prices Are Fixed, When Aggregate Planned Expenditure Exceeds Real

question 341

Multiple Choice

If prices are fixed, when aggregate planned expenditure exceeds real GDP, then

• A) inventories increase, signaling firms to decrease production and decrease real GDP.
• B) inventories decrease, signaling firms to increase production and increase real GDP.
• C) profits fall, signaling firms to decrease production and decrease real GDP.
• D) None of the above answers are correct.

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Definitions:

Cultural Exposure

The experience of encountering and interacting with customs, traditions, and practices different from one's own.

Self-Verification Strategies

Techniques individuals use to convince others to view them as they view themselves, in order to confirm their self-concept.

Reflexive Behavior

Behavior that an individual displays as a reaction to the behavior of others, often as part of a social interaction.

Social Identity

An individual's sense of who they are based on their group membership(s), such as social class, family, nationality, etc.