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:

Liquidated

The process of converting assets into cash or using them to pay off liabilities in the event of bankruptcy or closing a business.

Unsecured Creditors

Creditors who have lent money without obtaining specific assets as collateral, meaning they have no special claim on the debtor's property if the debtor fails to pay.

Liabilities With Priority

Obligations that have a preferential claim over other types of debts in the event of a liquidation or bankruptcy.

Net Realizable Value

The estimated selling price of goods, minus the costs of their sale or disposal.