If Planned Aggregate Expenditure Is Greater Than Total Production

question 113

Multiple Choice

If planned aggregate expenditure is greater than total production

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

---

Definitions:

Budget Deficit

The financial situation where a government's expenditures exceed its revenue over a specified period, leading to borrowing or the use of reserves.

Exchange Rates

The price of one currency expressed in terms of another, determining how much foreign currency can be obtained with a unit of domestic currency.

Transaction Categories

Transaction categories are classifications of financial transactions based on their nature, such as income, expenses, transfers, and investments, to help in managing finance.

Domestic Investors

Individuals or entities within a country that allocate their own funds or capital into domestic investments such as stocks, bonds, and real estate.