If Firms' Inventories Are Less Than They Planned,aggregate Planned Expenditure

question 415

Multiple Choice

If firms' inventories are less than they planned,aggregate planned expenditure is ________ real GDP and firms ________ their production.

• A) greater than; increase
• B) greater than; decrease
• C) less than; increase
• D) less than; decrease

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Definitions:

Monetary Policy

The process by which a central bank or monetary authority manages the money supply and interest rates to achieve economic objectives.

Interest Rates

The cost of borrowing money, typically expressed as a percentage of the amount borrowed, that borrowers pay to lenders over a specified period.

Money Supply

The sum of all financial resources in the form of cash and deposits in banks present within an economy at a given moment.

Federal Reserve Board

A central body of the Federal Reserve System, overseeing the nation's monetary policy and regulating banks.