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If Prices Are Fixed, When Aggregate Planned Expenditure Exceeds Real

Question 283

Multiple Choice

If prices are fixed, when aggregate planned expenditure exceeds real GDP, then


A) inventories decrease, signaling firms to increase production and increase real GDP.
B) profits fall, signaling firms to decrease production and decrease real GDP.
C) inventories increase, signaling firms to decrease production and decrease real GDP.
D) None of the above answers are correct.

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