If Firms Sell What They Expected to Sell, Which of the Following

question 302

Multiple Choice

If firms sell what they expected to sell, which of the following will be true?

• A)Aggregate expenditure will be greater than GDP.
• B)There will be no unplanned change in inventories.
• C)Inventories will rise and GDP and employment will fall.
• D)Aggregate expenditure will be less than GDP.
• E)Employment will rise.

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Definitions:

Value of Dollar

The strength and purchasing power of the US dollar, determined by its exchange rate with other currencies and the amount of goods or services it can buy.

Goods and Services

Physical items (goods) and activities provided by others for use or consumption (services).

Quantity Equation

An equation that relates the money supply, its velocity (rate at which money is exchanged), and the price level of goods and services in an economy.

Changes Hands

An expression referring to the act of transferring ownership of something from one person or group to another.