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:

Absolute Threshold

The minimum amount of sensory stimulation that can be detected 50% of the time.

Difference Threshold

A measure of the smallest increase or decrease in a physical stimulus that is required to produce a difference in sensation that is noticeable 50% of the time.

Psychophysical Threshold

The minimum level of stimulus intensity perceived by the sensory system.

Just Noticeable Difference

The smallest difference in stimulation required to detect a change in sensory inputs, also known as the difference threshold.