If Aggregate Expenditure Exceeds GDP,we Expect Inventories to Shrink and Firms

question 96

True/False

If aggregate expenditure exceeds GDP,we expect inventories to shrink and firms to increase production.

---

Definitions:

Economic Profits

The difference between total revenue and total costs, including both explicit and implicit costs, representing surplus earnings above normal expectations.

Profit-Maximizing

The way in which a business figures out the best price and quantity of production for optimal profit.

Output Level

The amount of goods or services produced by a company, industry, or economy within a specific period, often measured to assess productivity and efficiency.

Break-Even

The point at which total revenue equals total costs, meaning there is no net loss or gain.