In the Income-Expenditure Framework,if Planned Aggregate Expenditures Are Less Than

question 22

Multiple Choice

In the income-expenditure framework,if planned aggregate expenditures are less than real gross domestic product (GDP) ,_____.

• A)saving will increase
• B)the price level will increase
• C)inventories will increase
• D)inventories will decrease
• E)consumption will decrease

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Definitions:

Budget Deficit

A situation where a government's expenditures exceed its revenues during a specified period of time, leading to borrowing or debt accumulation.

Discretionary Fiscal Policy

Government policy involving the use of government spending and taxation levels to influence the economy, based on current conditions.

Entitlement Programs

Government programs that guarantee certain benefits to a particular group or segment of the population, such as Social Security or Medicare in the United States.

Presidential Discretion

The authority and freedom of action granted to the President in areas not explicitly defined by the constitution or statutes, often in the context of national security or foreign policy.