In a Small Economy in 2011,aggregate Expenditure Was $800 Million

question 153

Multiple Choice

In a small economy in 2011,aggregate expenditure was $800 million while GDP that year was $850 million.Which of the following can explain the difference between aggregate expenditure and GDP that year?

• A) Aggregate expenditure is always less than GDP in developed countries.
• B) Firm investment in inventories was less than anticipated in 2011.
• C) Firm investment in inventories was greater than anticipated in 2011.
• D) Aggregate expenditure is always less than GDP in developing countries.

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Definitions:

Annual Average Investment

The average amount invested over a year, generally calculated to evaluate the efficiency or profitability of investments.

Projected Income Statement

A projected income statement is a financial statement that estimates a company's revenue, expenses, and net income for a future period.

Asset's Life

The expected period during which an asset remains useful for its intended purpose or serviceable.