If Aggregate Planned Expenditure Equals GDP, Then

question 67

Multiple Choice

If aggregate planned expenditure equals GDP, then

• A) there must be no change in firms' inventories.
• B) the change in firms' inventories must be positive.
• C) the change in firms' inventories must be equal to the planned change.
• D) the change in firms' inventories must be negative.
• E) actual aggregate expenditure might be greater than, equal to, or less than real GDP.

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Definitions:

Kilowatt-hours

A unit of energy measurement equivalent to one kilowatt of power expended for one hour, commonly used to measure electricity consumption.

Fixed Costs

Expenses that remain constant regardless of the amount of output or sales, like lease payments, wages, and premiums.

Peak-period Capacity

The maximum output a business can produce in a short period when demand is the highest, often requiring efficient use of resources.

Fabrication Department

A specialized section of a manufacturing company where raw materials are assembled, shaped, or processed into finished goods.