If Real GDP Equals Aggregate Planned Expenditure, Then Inventories

question 204

Multiple Choice

If real GDP equals aggregate planned expenditure, then inventories

• A) rise above their target levels.
• B) fall below their target levels.
• C) equal their target levels.
• D) are either above or below their target levels depending on whether planned inventories are above or below their target levels.
• E) None of the above answers is necessarily correct because there is no relationship between inventories and aggregate planned expenditure.

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Definitions:

Sufficient Funds

Having enough money available in an account to cover checks or withdrawals.

Forgery

The act of falsely making or altering a document with the intent to defraud.

Fraud

Intentional misleading to achieve unjust advantages or to strip someone of their rightful entitlement.

Stop Payment

A request made to a financial institution to cancel the processing of a check or payment transaction before it has been completed.