If Aggregate Planned Expenditure Exceeds Real GDP Then

question 37

Multiple Choice

If aggregate planned expenditure exceeds real GDP then

• A)inventories increase, and the short- run aggregate supply curve shifts rightward.
• B)inventories increase, and as real GDP increases, a movement up along the AE curve occurs.
• C)inventories decrease, and as real GDP increases, a movement up along the AE curve occurs.
• D)inventories decrease, and the AE curve shifts downward.
• E)inventories increase, and the AE curve shifts upward.

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Definitions:

Proposal

A formal suggestion or plan put forward for consideration or discussion by others.

Timing

The act of choosing the most appropriate point in time to initiate or execute a specific action or event for the desired outcome.

Coercive Power

The ability to force or compel someone to act in a certain way through threats or punishment.

Threat

A potential cause of harm or adverse effect on someone or something.