When Aggregate Planned Expenditure Is Less Than GDP

question 59

Multiple Choice

When aggregate planned expenditure is less than GDP,

• A) the economy definitely is at its equilibrium expenditure and firms do not change production.
• B) the economy definitely is at its equilibrium expenditure but, even so, firms decrease production.
• C) the economy might be at its equilibrium expenditure and, if it is, firms do not change their production.
• D) firms increase production until the economy reaches equilibrium expenditure.
• E) firms decrease production until the economy reaches equilibrium expenditure.

---

Definitions:

Social Inequality

A condition where societal resources, opportunities, and privileges are distributed unequally among people in a society.

Living Standards

The level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class or geographic area.

Worker Autonomy

The degree to which employees have the freedom, independence, and discretion in scheduling their work and determining the procedures carried out in their jobs.

Technological Determinism

The theory that a society's technology drives the development of its social structure and cultural values.