When Saving Is Less Than Planned Investment in the Aggregate

question 13

Multiple Choice

When saving is less than planned investment in the aggregate expenditures model of a private closed economy then:

• A) Real GDP will decrease
• B) The rate of interest will decline
• C) There will be a decline in the price level
• D) There will be a rise in real GDP

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Definitions:

Direct Labour Hours

The total hours worked by employees directly involved in the manufacturing process, affecting the overall production cost.

Actual Manufacturing Overhead

The total of all actual indirect costs incurred in the production process, not directly tied to a specific product.

Job-Order Cost Sheets

Documents that track the expenses associated with manufacturing a specific job, including materials, labor, and overhead.

Work in Process

Goods that are in the production process but have not yet been completed.