Assume That Inventories Declined by More Than Analysts Predicted

question 213

Multiple Choice

Assume that inventories declined by more than analysts predicted.This implies that

• A)planned aggregate expenditure was greater than real GDP.
• B)planned aggregate expenditure was equal to real GDP.
• C)planned aggregate expenditure was less than real GDP.
• D)planned aggregate expenditure is unrelated to real GDP.

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Definitions:

Price Increase

An adjustment in the cost of goods or services, typically resulting in consumers paying more for those items.

Contribution Margin Ratio

A financial metric that measures how much of a company's revenue is left over after variable costs are subtracted, expressed as a percentage of sales revenue.

Variable Expense Ratio

A ratio computed by dividing variable expenses by sales.

Operating Leverage

A financial concept that measures the proportion of fixed costs in a company's cost structure, indicating its sensitivity to changes in sales volume.