If There Is an Unplanned Increase in Inventories, Aggregate Planned

question 127

Multiple Choice

If there is an unplanned increase in inventories, aggregate planned expenditure is

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

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Definitions:

Earned

Received as a result of work or effort.

Simple Interest Rate

The rate at which simple interest is calculated, usually on an annual basis.

Borrowed

Funds taken as a loan from a lender with the agreement to pay back with interest.

Term Deposit

A fixed-term investment held at a financial institution that pays interest at a specified rate and matures on a specific date.