If Planned Aggregate Expenditure Is Above Potential GDP and Planned

question 164

Multiple Choice

If planned aggregate expenditure is above 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 an expansion.
• D)the economy is at full employment.

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Definitions:

Cash Flow Stream

A cash flow stream is a series of cash inflows and outflows over a period of time, typically used in financial analysis to determine the value or profitability of an investment.

Rate of Return

The gain or loss of an investment over a specified period, expressed as a percentage of the investment’s cost.

Annuity

A financial product that pays out a fixed stream of payments to an individual, typically used as an income stream for retirees.

Present Value

The contemporary value of a forthcoming sum of money or cash flow series, adjusted for a specific rate of return.