If Planned Aggregate Expenditure Is Below Potential GDP and Planned

question 303

Multiple Choice

If planned aggregate expenditure is below potential GDP and planned aggregate expenditure equals GDP,then

• A)actual inventory investment will be less than planned inventory investment.
• B)actual inventory investment will be greater than planned inventory investment.
• C)the economy is in a recession.
• D)the economy is at full employment.

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Definitions:

Payor Bank

The bank that dispenses the payment on a written draft or check upon presentation.

Drawee Bank

The financial institution upon which a check is drawn or which is directed to pay the specified amount.

Collecting Bank

A financial institution involved in processing items for payment, such as checks, on behalf of a depositor.

Collecting Bank

A bank that handles the processing of payments (like checks) on behalf of the payee or a client bank.