-The Table Above Gives Data for the Nation of Mosh

question 12

Multiple Choice

$$\begin{array} { c c c c c c } \begin{array} { c } \text { Consumption } \\\text { Real GDP, } Y \\\text { (trillions of }\end{array} & \begin{array} { c } \text { Government } \\\text { (trillions of }\end{array} & \begin{array} { c } \text { Investment, I } \\\text { (trillions of }\end{array} & \begin{array} { c } \text { expenditure, } G \\\text { (trillions of }\end{array} & \begin{array} { c } \text { Exports, } X \\\text { (trillions of }\end{array} & \begin{array} { c } \text { Imports, } M \\\text { (trillions of }\end{array} \\2005 \text { dollars) } & \text { 2005 dollars) } & \text { 2005 dollars) } & \text { 2005 dollars) } & \text { 2005 dollars) } & 2005 \text { dollars) } \\\hline 0 & 1.00 & 2 & 1 & 1 & 0.50 \\1 & 1.75 & 2 & 1 & 1 & 0.75 \\2 & 2.50 & 2 & 1 & 1 & 1.00 \\3 & 3.25 & 2 & 1 & 1 & 1.25 \\4 & 4.00 & 2 & 1 & 1 & 1.50 \\5 & 4.75 & 2 & 1 & 1 & 1.75 \\6 & 5.50 & 2 & 1 & 1 & 2.00 \\7 & 6.25 & 2 & 1 & 1 & 2.25 \\8 & 7.00 & 2 & 1 & 1 & 2.50 \\9 & 7.75 & 2 & 1 & 1 & 2.75 \\10 & 8.50 & 2 & 1 & 1 & 3.00\end{array}$$
-The table above gives data for the nation of Mosh.If real GDP is $6 trillion, then

• A) firms decrease production because inventories exceed their target levels.
• B) firms increase production because inventories are less than their target levels.
• C) the economy has reached equilibrium and no change in production will occur.
• D) firms increase production because inventories exceed their target levels.
• E) we need more information to determine whether firms increase, decrease, or do not change their production.

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Definitions:

Cost of Goods Sold

Direct expenditures involved in producing the merchandise a business sells.

FIFO Cost Flow

An inventory valuation method where the first items purchased are the first ones to be sold, assuming costs rise over time.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated by adding purchases to the beginning inventory and subtracting the cost of goods sold.

Laptop Computers

Portable personal computers designed for mobile use, characterized by a screen and a keyboard.