If Aggregate Expenditures Exceed the Domestic Output in a Private

question 80

Multiple Choice

If aggregate expenditures exceed the domestic output in a private closed economy:

• A)leakages will exceed injections.
• B)planned investment will exceed saving.
• C)unplanned investment in inventories will occur.
• D)saving will exceed planned investment.

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Definitions:

Inflation

The rate at which the general level of prices for goods and services is rising, eroding purchasing power over time.

Budget Deficit

The financial situation where a government's expenditures exceed its revenues within a specified period.

Flow Variable

A quantity measured over a specified period of time, indicating the rate of change in a variable.

Stock Variable

A quantity measured at a specific point in time, representing a snapshot of a certain value, such as the amount of money in a savings account.