In a Small Economy in 2017, Aggregate Expenditure Was $800

question 148

Multiple Choice

In a small economy in 2017, aggregate expenditure was $800 million while GDP that year was $850 million.Which of the following can explain the difference between aggregate expenditure and GDP that year?

• A)Aggregate expenditure is always less than GDP in developed countries.
• B)Firm investment in inventories was less than anticipated in 2017.
• C)Firm investment in inventories was greater than anticipated in 2017.
• D)Aggregate expenditure is always less than GDP in developing countries.
• E)Consumer spending was greater than expected.

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Definitions:

Technological Change

The innovation and improvement in technology, processes, or methods, leading to increased efficiency, productivity, and new product development, affecting various sectors of an economy.

Productivity Growth

The increase in the efficiency of production in an economy, often measured by the output per unit of input over time.

Disposable Income

After-tax income. Term applies to individuals and to the nation.

Welfare Rolls

A list or register of individuals who are receiving welfare benefits provided by a government.