In the Income-Expenditure Framework, If Planned Aggregate Expenditures Are Less

question 134

Multiple Choice

In the income-expenditure framework, if planned aggregate expenditures are less than real GDP.How will inventories be affected?  

• A) Inventories will stay constant. 
• B) Inventories will match aggregate expenditures. 
• C) Inventories will increase. 
• D) Inventories will decrease.

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Definitions:

Above-market Pricing

A pricing strategy where goods or services are priced higher than the prevailing market rates, often to signal superior quality or prestige.

Price Setter

An entity in the market that has the power to influence or set the prices of goods or services, often due to market dominance.

Demand Factors

Factors that determine consumers’ willingness and ability to pay for products and services.

Global Economy

The interconnected world economy where goods, services, and labor are exchanged across international borders.