If Aggregate Expenditure Is Less Than GDP,inventories Will

question 62

Multiple Choice

If aggregate expenditure is less than GDP,inventories will

• A) grow and prices will fall
• B) grow and GDP will rise
• C) grow and GDP will fall
• D) shrink and GDP will rise
• E) shrink and GDP will fall

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Definitions:

Fair Market Value

The estimated price at which an asset would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.

Book Values

A term used in accounting to refer to the value of an asset as reported on the company's balance sheet, calculated as the cost of an asset minus any depreciation or amortization.

Original Costs

The initial amount spent to acquire an asset, including purchase price and all expenses incurred to bring the asset to its intended use.

Written Agreement

A formal contract which outlines the terms and conditions between parties in written form.