If Real GDP Is Less Than Aggregate Expenditure, Then Inventories

question 66

Multiple Choice

If real GDP is less than aggregate expenditure, then inventories will _____, and firms will _____.

• A) increase; cut back on future production
• B) fall; decrease the prices of their products
• C) increase; lower their product prices
• D) fall; increase their future production

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Definitions:

Water Reabsorption

The process by which water is absorbed from the filtrate in the kidneys back into the blood.

Plasma Osmolality

A measure of the concentration of solutes in blood plasma, important for maintaining proper fluid balance and osmotic pressure in the body.

ADH Production

The process by which the posterior pituitary gland secretes antidiuretic hormone (ADH), which helps control the balance of water in the body by affecting the kidneys.

Na+

Sodium ions, essential electrolytes in bodily fluids that play key roles in nerve impulse transmission and muscle contraction.