If Total Intended Spending Is Greater Than GDP

question 36

Multiple Choice

If total intended spending is greater than GDP

• A) firms cut production and avoid expansion.
• B) inventories fall below desired levels.
• C) interest rates decline sharply.
• D) business investment will lag.
• E) GDP tends to remain unchanged.

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Definitions:

Hermann Ebbinghaus

A German psychologist best known for his pioneering work on memory and learning, including the discovery of the forgetting curve.

Forgetting Occurs

The process where information once learned and stored in the brain is lost or becomes harder to recall over time.

Encoding Failure

A situation in which information does not enter the brain's long-term memory and thus is forgotten.

Long-Term Memory

The phase of memory in which information is stored for extended periods of time, potentially lifelong, beyond the capacity of short-term or working memory.