If Aggregate Planned Expenditure Is Greater Than Real GDP

question 256

Multiple Choice

If aggregate planned expenditure is greater than real GDP,

• A) an unplanned decrease in inventories leads to an increase in production.
• B) an unplanned increase in inventories leads to a decrease in production.
• C) a planned decrease in inventories leads to an decrease in production.
• D) a planned increase in inventories leads to an increase in production.
• E) an unplanned decrease in inventories leads to an increase in the price level.

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Definitions:

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