When the AE Line Lies Above the 45° Line

question 8

Multiple Choice

When the AE line lies above the 45° line,

• A)there are unplanned increases in inventories.
• B)there are unplanned decreases in inventories.
• C)real GDP exceeds aggregate planned expenditure.
• D)aggregate planned expenditure is less than real GDP.
• E)the price level is rising.

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Definitions:

Mutually Beneficial

A situation, agreement, or relationship that provides advantages or positive outcomes to all parties involved.

Outsourcing

Outsourcing is the practice of hiring third-party service providers to handle certain business functions or operations outside the company to save costs and focus on core competencies.

Outside Vendors

External organizations or individuals that supply goods or services to a company, often in areas not core to the company’s main business.

In-house

Activities or operations performed within an organization by its own members or employees, rather than by external parties.