If Firms Find That Consumers Are Purchasing More Than Expected

question 120

Multiple Choice

If firms find that consumers are purchasing more than expected, which of the following would you expect?

• A)Aggregate expenditure will likely be greater than GDP.
• B)Aggregate expenditure will likely be less than GDP.
• C)The economy will adjust to macroeconomic equilibrium as inventories rise and production and employment rise.
• D)The economy will adjust to macroeconomic equilibrium as inventories fall and production and employment rise.

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Definitions:

Capsaicin

A chemical compound found in chili peppers that generates the sensation of heat or burning in any tissue with which it comes in contact.

Sodium Ions

Positively charged particles of sodium, which play crucial roles in the body such as maintaining fluid balance, transmitting nerve impulses, and muscle contraction.

Substance P

A neuropeptide involved in the transmission of pain and other sensory information to the central nervous system.

Pheromones

Chemical substances produced and released into the environment by an animal, affecting the behavior or physiology of others of the same species.