For a Private Closed Economy, an Unintended Decline in Inventories

question 36

Multiple Choice

For a private closed economy, an unintended decline in inventories suggests that

• A) aggregate expenditures are less than the business sector expected them to be.
• B) aggregate expenditures exceed production.
• C) actual investment exceeds saving.
• D) planned investment is greater than consumption.

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Definitions:

Remodeling

The process of improving, updating, or altering the structure or layout of a building to enhance its appearance or functionality.

Marginal Costs

The additional charge associated with making one more unit of a product or service.

Fixed Capital

Assets and investments in physical goods such as buildings and machinery that are not consumed in the production process.

Variable Labor

Labor costs that vary directly with the level of production or business activity.