If Planned Aggregate Expenditure Is Below Potential GDP and Planned

question 115

Multiple Choice

If planned aggregate expenditure is below potential GDP and planned aggregate expenditure equals GDP, then:

• A)actual inventory investment will be less than planned inventory investment.
• B)actual inventory investment will be greater than planned inventory investment.
• C)the economy is in equilibrium at less than full employment.
• D)the economy is at full employment.

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Definitions:

Call Option

A financial contract that gives the purchaser the right, but not the obligation, to buy an asset at a predetermined price before or at the expiration date.

Put Option

A financial contract giving the option holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time.

Call Option

A financial contract giving the buyer the right, but not the obligation, to buy a stock, bond, commodity, or other asset or instrument at a specified price within a specific time period.

Stock Price

The cost per share at which a company's stock is bought and sold in the stock market.