When aggregate planned expenditure exceeds real GDP,
A) an unplanned increase in inventories occurs.
B) real GDP remains at its equilibrium level.
C) firms decrease production.
D) an unplanned decrease in inventories occurs.
E) real GDP decreases.
D
You might also like to view...
In a market economy, what encourages firms to develop new products and production processes?
A) contracts B) insurance C) patents D) accounting rules
Why might an economist argue that it could be damaging to the economic growth of a nation if it focused mostly on the production of consumer goods?
What will be an ideal response?
A monopoly is inefficient because: a. consumers are forced to pay higher prices for products
b. firms are able to earn economic profits. c. the cost of increased production is less than the value that society places on it. d. price exceeds marginal revenue.
A problem related to the declining terms of trade is that _________, once the costliest portion of manufacturing, now represents only a minor expense.
Fill in the blank(s) with the appropriate word(s).