If Aggregate Planned Expenditure Equals GDP, Then Firms

question 50

Multiple Choice

If aggregate planned expenditure equals GDP, then firms'

• A) inventories exceed planned inventories.
• B) inventories are less than planned inventories.
• C) inventories equal planned inventories.
• D) do not have any inventories.
• E) actual investment has no relationship to their planned investment.

---

Definitions:

Fixed Costs

Fixed charges that are unaffected by changes in production or sales volumes, including rental fees, wages, and insurance costs.

Variable Costs

Expenses that change in proportion to the activity or volume of a business operation, such as materials and labor.

Mass Customization

A production and marketing strategy that combines the flexibility and personalization of custom-made products with the low unit costs associated with mass production.

Supply-Chain Performance

A measure of how well a supply chain fulfills customer demands and manages resources efficiently.