In a Small Economy in 2016, Aggregate Expenditure Was $850

question 42

Multiple Choice

In a small economy in 2016, 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 2016.
• C)Firm investment in inventories was greater than anticipated in 2016.
• D)Aggregate expenditure is always less than GDP in developing countries.
• E)Aggregate expenditure does not account for consumer spending.

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Definitions:

Mortality

The incidence of death within a population.

Literacy Rate

Literacy rate refers to the percentage of people within a population that can read and write at a specified age.

Agriculture

Agriculture is the practice of cultivating soil, producing crops, and raising livestock for food, fiber, and other products.

Developed Countries

Nations with advanced economic systems, high standards of living, robust infrastructures, and comprehensive social welfare systems.