If Aggregate Planned Expenditures Are Less Than Real GDP, Then

question 208

Multiple Choice

If aggregate planned expenditures are less than real GDP, then

• A) inventories increase above their planned levels and businesses decrease their production.
• B) inventories decrease below their planned levels and businesses increase their production.
• C) there is no equilibrium level of real GDP.
• D) inventories increase above their planned levels and businesses increase their production.
• E) unplanned inventory changes equal zero.

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Definitions:

Deductive Argument

A form of reasoning where, if the premises are true, the conclusion must also be true, proceeding from general principles to a specific case.

Causal Arguments

Reasoning that seeks to establish a cause-and-effect relationship between two or more phenomena.

Correlation

A measure or degree of relationship between two variables where changes in one variable correspond to changes in the other, though not necessarily implying causation.

Self-Selected Sample

A sample where only the people most interested in the poll or survey participate.