If Firms Find That Consumers Are Purchasing More Than Expected,which

question 189

Multiple Choice

If firms find that consumers are purchasing more than expected,which of the following would you expect?

• A)Aggregate expenditure will likely be greater than GDP.
• B)Aggregate expenditure will likely be less than GDP.
• C)The economy will adjust to macroeconomic equilibrium as inventories rise,and production and employment fall.
• D)The economy will adjust to macroeconomic equilibrium as inventories fall,and production and employment fall.

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Definitions:

MRP

Marginal Revenue Product, the additional revenue generated from employing one more unit of a factor of production.

Unit of Input

The smallest measure of an input (like labour, materials) used in the production of goods or services.

Complementary Resources

Assets or inputs that are used together with another resource to produce a good or service, enhancing each other's value in the process.

Employment

The condition of having paid work, involving an agreement where someone is paid to perform specific duties.