Firms in a Small Economy Anticipated That Inventories Would Grow

question 57

Multiple Choice

Firms in a small economy anticipated that inventories would grow over the past year by $750,000, and over that year, inventories grew by exactly $750,000.This implies that

• A)aggregate expenditure and GDP were equal that year.
• B)there was an unplanned increase in inventories that year.
• C)there was an unplanned decrease in inventories that year.
• D)aggregate expenditure was greater than GDP that year.
• E)there was an unanticipated rise in consumer spending.

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Definitions:

American Psychological Association

A professional organization representing psychologists in the United States, dedicated to advancing psychological science and practice.

Informed Decision

A decision made based on a full understanding of the facts, implications, and possible outcomes.

Double-blind Studies

Research experiments where neither the participants nor the experimenters know who is receiving the treatment versus a placebo, minimizing bias.

Placebo Effect

A beneficial effect produced by a placebo drug or treatment, which cannot be attributed to the properties of the placebo itself, and must therefore be due to the patient's belief in it.