If Aggregate Planned Expenditure Exceeds GDP, Then

question 4

Multiple Choice

If aggregate planned expenditure exceeds GDP, then

• A) firms' inventories are larger than planned.
• B) the change in firms' inventories is the planned change.
• C) firms' inventories are smaller than planned.
• D) aggregate income is less than GDP.
• E) firms' have no inventories.

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Definitions:

Profit-Maximizing

The method through which a company identifies the pricing and production quantity that maximizes its profits.

Economic Standpoint

A perspective or analysis based on economic principles, often considering factors like scarcity, supply and demand, and cost-benefit analysis.

Inefficient Manner

Performance or operation in a way that does not achieve the best possible outcome or wastes resources.

Marginal Revenue

The supplementary income generated through the sale of one extra unit of a good or service.