If an Unplanned Increase in Business Inventories Occurs at Some

question 84

Multiple Choice

If an unplanned increase in business inventories occurs at some level of GDP, then GDP:

• A)entails a rate of aggregate expenditures in excess of the rate of aggregate production.
• B)may be either above or below the equilibrium output.
• C)is too low for equilibrium.
• D)will decrease.

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Definitions:

Nonprice Rationing

The distribution of goods and services based on criteria other than price, such as waiting times or quotas.

Health Care Insurance

A type of insurance that covers the whole or part of the risk of a person incurring medical expenses, spreading the risk over a large number of persons.

Health Care Resources

The total means available for preventing, diagnosing, and treating illness, which include medical personnel, facilities, equipment, and pharmaceuticals.

Demand And Supply Diagram

A graphical representation used in economics to show the relationship between the price of a good and its quantity demanded and supplied.