If Aggregate Expenditure Is Less Than GDP, How Will the Economy

question 19

Multiple Choice

If aggregate expenditure is less than GDP, how will the economy reach macroeconomic equilibrium?

• A)Inventories will decline, and GDP and employment will decline.
• B)Inventories will rise, and GDP and employment will decline.
• C)Inventories will decline, and GDP and employment will rise.
• D)Inventories will rise, and GDP and employment will rise.
• E)Inventories will rise, GDP will rise, and unemployment will fall.

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Definitions:

Partnership Dissolves

The process by which the association between individuals or entities conducting a business jointly is formally ended.

Limited Liability Partnership

A partnership in which some or all partners have limited liabilities, protecting them from certain legal actions and financial responsibilities.

Personal Liability

The responsibility of an individual to settle debts or legal obligations from their own assets, rather than the protection offered by operating within a corporation or limited liability entity.

Malpractice

Professional misconduct or the failure to exercise the requisite degree of skill as a professional. Negligence—the failure to exercise due care—on the part of a professional, such as a physician or an attorney, is commonly referred to as malpractice.