If Planned Aggregate Expenditure Is Greater Than Total Production, Then

question 92

Multiple Choice

If planned aggregate expenditure is greater than total production, then:

• A)actual inventories will equal planned inventories.
• B)firms will experience unplanned increase in inventories.
• C)GDP will increase.
• D)the economy is in equilibrium.

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Definitions:

Mixing Department

A section within a manufacturing process where various materials or ingredients are combined to produce a product.

Manufacturing Overhead

All manufacturing costs other than direct labor and direct materials, including costs related to running the factory such as utilities or rent.

Work In Process

Inventory that includes goods in the middle of the production process but not yet completed, representing a portion of a manufacturing company's current assets.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, such as utilities for the production plant, depreciation of manufacturing equipment, and salaries of maintenance personnel.