If Aggregate Planned Expenditures Exceed Real GDP, Then

question 152

Multiple Choice

If aggregate planned expenditures exceed 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 decrease below their planned levels and businesses decrease their production.
• E) unplanned inventory changes equal zero.

Understand the distinction between capital (financial) leases and operating leases.

Identify the conditions under which a lease is classified as a capital or operating lease for accounting purposes.

Recognize the financial implications of leasing for both the lessee and the lessor.

Comprehend the role and terms of sale and leaseback agreements.

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Definitions:

Hypermarket

A large retail facility that combines a supermarket and a department store, offering a wide variety of food and general merchandise at low prices.

Outlet Store

An outlet store is a retail store that sells products directly from one or more manufacturers, typically at lower prices, often featuring overstock, discontinued ranges, or seconds.

Warehouse Clubs

Large-scale members-only retail stores that sell a wide range of merchandise, usually in bulk and at discounted prices.

Ultra-Low Prices

Pricing strategies that set the cost of goods or services significantly lower than the competition, often to drive market share growth or clear inventory.