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If Real GDP Equals Aggregate Planned Expenditure, Then Inventories

Question 204

Multiple Choice

If real GDP equals aggregate planned expenditure, then inventories


A) rise above their target levels.
B) fall below their target levels.
C) equal their target levels.
D) are either above or below their target levels depending on whether planned inventories are above or below their target levels.
E) None of the above answers is necessarily correct because there is no relationship between inventories and aggregate planned expenditure.

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