In a Small Economy in 2018,aggregate Expenditure Was $850 Million

question 117

Multiple Choice

In a small economy in 2018,aggregate expenditure was $850 million while GDP that year was $800 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 2018.
• C)Firm investment in inventories was greater than anticipated in 2018.
• D)Aggregate expenditure is always less than GDP in developing countries.

---

Definitions:

Conditional Indorsement

Refers to a signature on a financial document, such as a check, that limits the conditions under which it can be valid.

Negotiability

The quality of a financial instrument, such as a check or bill of exchange, that allows it to be transferred from one party to another through endorsement or delivery.

Traveler's Checks

Preprinted, fixed-amount checks designed to allow the person signing it to make an unconditional payment to someone else as a result of having paid the issuer for this privilege.

Negotiable

Capable of being transferred or exchanged for value by endorsement or delivery.