If Aggregate Planned Expenditure Exceeds Real GDP

question 270

Multiple Choice

If aggregate planned expenditure exceeds real GDP,

• A) firms are not maximizing their profits.
• B) planned investment is greater than planned savings.
• C) actual inventories decrease below their target.
• D) planned consumption expenditure is less than actual consumption expenditure.

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Definitions:

Lithosphere

Earth’s upper, rigid layer composed of the crust and uppermost mantle.

Continental Crust

The thick layer of granite, sedimentary, and metamorphic rocks that forms the continents and continental shelves, distinct from oceanic crust.

Oceanic Crust

A thin layer of Earth's crust that lies beneath the ocean basins, composed mainly of basalt.

Elevation

The vertical distance of an object above or below a reference datum (usually mean sea level); generally the height of a ground point above sea level.