If There Is an Unplanned Decrease in Inventories, Aggregate Planned

question 97

Multiple Choice

If there is an unplanned decrease 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)greater than real GDP, and firms increase investment.

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Definitions:

Administrative Expenses

Costs associated with the general administration of a business, such as salaries of executive officers, legal and secretarial expenses.

Client-visits

The instances when a client or customer visits a business premise for the purpose of obtaining services or conducting business.

Activity Variance

The difference between budgeted and actual costs due to changes in the level of activity.

Budgeting

Formulating a scheme for managing your funds, highlighting a firm's monetary and practical ambitions.