Use the Figure Below to Answer the Following Questions

question 40

Multiple Choice

Use the figure below to answer the following questions.
Figure 11.2.2
The economy depicted does not engage in international trade and has no government.Planned aggregate expenditure AE) is equal to the sum of consumption expenditure C) and investment I) .
-If there is an unplanned decrease in inventories, aggregate planned expenditure is

• A)less than real GDP, and firms increase production.
• B)greater than real GDP, and firms decrease production.
• C)greater than real GDP, and firms increase production.
• D)less than real GDP, and firms decrease production.
• E)greater than real GDP, and firms increase investment.

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Definitions:

Admission Fee

A charge for entry, often used in the context of events, clubs, or institutions.

Capital Balance

The amount of money in a firm's capital account, reflecting the owner's initial investment plus retained earnings.

Profits and Losses

A financial statement that shows the revenue, costs, and expenses over a certain period, determining the company's net income or loss.

Admitted

In insurance, relates to insurers that are officially authorized to do business in a particular state.