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When Aggregate Planned Expenditure Exceeds Real GDP

Question 202

Multiple Choice

When aggregate planned expenditure exceeds real GDP,


A) firms increase production and real GDP increases.
B) firms decrease production and real GDP increases.
C) firms decrease production and real GDP decreases.
D) firms increase production and real GDP decreases.
E) firms do nothing because induced expenditure will increase so that the equilibrium is reached.

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