If Aggregate Planned Expenditure Is Less Than Real GDP

question 420

Multiple Choice

If aggregate planned expenditure is less than real GDP

• A) real GDP will increase.
• B) real GDP remains unchanged.
• C) real GDP will either decrease or increase, depending on the MPC.
• D) inventories will increase above their target level and real GDP will decrease.

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of goods sold in a company, including material and labor costs.

Balance Sheet

A report detailing a company's assets, liabilities, and equity held by shareholders at a certain moment.

Spreadsheet

A digital tool that allows users to organize, calculate, and analyze data in tabular form, commonly used for financial analysis and planning.

Job-Order Costing

An accounting method that assigns costs to individual jobs or batches, typically used in manufacturing on a per-order basis.