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:

Bottom-up Processes

Decision-making or organizational processes that start at the lowest level of the hierarchy and move upwards, often driven by input from lower-level participants.

Top-down Processes

Cognitive processes driven by higher-level mental processes, such as experiences and expectations, influencing perception.

Mutualism

A type of ecological interaction where both participating species benefit from the relationship.

Commensalism

A relationship between two organisms where one benefits and the other is neither harmed nor benefited significantly.