In the Aggregate Expenditure Model, When Real GDP Is Greater

question 51

Multiple Choice

In the aggregate expenditure model, when real GDP is greater than aggregate planned expenditure

• A) unplanned inventories are being accumulated.
• B) inventories are being depleted.
• C) inventories are not being changed.
• D) this cannot happen, because the two variables are always equal.

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Definitions:

Protectionist Trade Policies

Measures implemented by a government to restrict or regulate international trade, with the aim of protecting domestic industries from foreign competition.

Japan

An East Asian island country known for its technological advancements and rich cultural heritage.

China

A country in East Asia, the world's most populous nation, known for its significant influence on global economy, politics, and culture.

Trade Surplus

Occurs when the value of a country’s exports exceeds the value of its imports over a given period.