If Aggregate Planned Expenditure Is Less Than Real GDP, Then

question 136

Multiple Choice

If aggregate planned expenditure is less than real GDP, then inventories

• A)increase and real GDP increases.
• B)remain constant and real GDP remains constant.
• C)decrease and real GDP decreases.
• D)decrease and real GDP increases.
• E)increase and real GDP falls.

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Definitions:

Cost Of Goods Sold

represents the direct costs attributable to the production of goods sold by a company, including material and labor costs.

Merchandise Purchases

The acquisition of goods that a company intends to resell to customers.

Fixed Product Cost

Costs that do not vary with the level of production or sales, such as salaries of permanent employees and rent.

Factory Supervisor

An individual who oversees the work of employees in a manufacturing facility, ensuring that production goals and standards are met.