Question : 41) If aggregate planned expenditures less than real GDP, then A) : 1240560

41) If aggregate planned expenditures are less than real GDP, then

A) inventories increase above their planned levels and businesses decrease their production.

B) inventories decrease below their planned levels and businesses increase their production.

C) there is no equilibrium level of real GDP.

D) inventories increase above their planned levels and businesses increase their production.

E) unplanned inventory changes equal zero.

42) When real GDP exceeds aggregate planned expenditure

A) firms increase production.

B) real GDP increases.

C) an unplanned decrease in inventories occurs.

D) an unplanned increase in inventories occurs.

E) real GDP remains at its equilibrium.

43) When GDP = $2.5 trillion, C = $1.0 trillion, I = $0.6 trillion, G = $0.4 trillion, and NX = $0. Then

A) unplanned inventory change = $0.5 trillion.

B) aggregate planned expenditure = $2.5 trillion.

C) aggregate planned expenditure = $1.6 trillion.

D) unplanned inventory change = -$0.5 trillion.

E) equilibrium expenditure = $2.0 trillion.

44) Which of the following situations leads to an unplanned increase in inventories of $2.0 trillion?

A) real GDP = $5.0 trillion and aggregate planned expenditures = $7.0 trillion

B) real GDP = $5.0 trillion and aggregate planned expenditures = $5.0 trillion

C) real GDP = $6.0 trillion and aggregate planned expenditures = $4.0 trillion

D) real GDP = $8.0 trillion and aggregate planned expenditures = $5.0 trillion

E) More information is needed about planned investment and actual investment.

45) Points where the aggregate expenditure (AE) curve lie above the 45° line are points where aggregate planned expenditure is

A) greater than real GDP.

B) less than real GDP.

C) equal to real GDP.

D) the inverse of real GDP.

E) not related to real GDP.

46) If aggregate planned expenditure is greater than GDP, then

A) inventory investment is smaller than planned.

B) inventory investment is larger than planned.

C) production is too high.

D) a recession will result.

E) the consumption function will shift downward to restore the equilibrium.

47) When aggregate planned expenditure exceeds real GDP,

A) firms decrease production.

B) real GDP decreases.

C) an unplanned decrease in inventories occurs.

D) an unplanned increase in inventories occurs.

E) real GDP remains at its equilibrium level.

48) If aggregate planned expenditure exceeds real GDP, then

A) unplanned inventory changes are positive.

B) unplanned inventory changes are negative.

C) aggregate planned expenditure must decrease to restore the equilibrium.

D) real GDP will decrease.

E) planned inventory changes must be negative.

49) When the AE line lies above the 45° line,

A) there are unplanned decreases in inventories.

B) aggregate planned expenditure is less than real GDP.

C) there are unplanned increases in inventories.

D) real GDP exceeds aggregate planned expenditure.

E) the price level is rising.

50) When aggregate planned expenditure exceeds real GDP, there are unplanned ________ in inventories, and firms ________ production, so that real GDP ________.

A) decreases; decrease; increases

B) increases; decrease; decreases

C) increases; increase; increases

D) decreases; increase; increases

E) decreases; decrease; decreases