When Aggregate Planned Expenditure Is Less Than GDP

question 95

Multiple Choice

When aggregate planned expenditure is less than GDP,

• A) firms increase production until the economy reaches equilibrium expenditure.
• B) firms decrease production until the economy reaches equilibrium expenditure.
• C) the economy might be at its equilibrium expenditure and if it is, firms do not change their production.
• D) the economy definitely is at its equilibrium expenditure and firms do not change production.
• E) the economy definitely is at its equilibrium expenditure but even so, firms decrease production.

Distinguish between internal and external costs and benefits.

Recognize the conditions under which markets can achieve efficiency.

Understand the role of government intervention in correcting market failures.

Identify examples of public goods and their characteristics.

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Definitions:

Soil Conditions

Refers to the physical, chemical, and biological status of the ground used for agricultural or construction purposes.

Self-Monitor

An individual's ability to regulate their behavior or presentation in social or professional settings according to situational demands or context.

Modes of Thinking

The various ways in which individuals process information, make decisions, and solve problems.

Modes of Acting

Different styles or methods through which individuals can express themselves or perform tasks.