If Real GDP Is $1,000 Billion and the Aggregate Expenditure

question 22

Multiple Choice

If real GDP is $1,000 billion and the aggregate expenditure is $850 billion, then the change in inventories will be:

• A) -$150 million.
• B) $1,850 million.
• C) $150 million.
• D) -$1,850 million.

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Definitions:

Operating Budgets

Detailed projections that outline expected income and expenses related to the day-to-day operations of an organization over a specific period.

Budgeted Income Statement

A financial statement that projects income and expenses for a future period, typically used for planning and budgeting purposes.

Flexible Budgets

A financial plan that adjusts to varying levels of operational activity or volume.

Fixed And Variable

Terms describing costs within a business; fixed costs do not change with the volume of production, while variable costs do.