Using the aggregate expenditures model, which of the following occurs if aggregate expenditures fall short of real GDP?
I. Actual investment exceeds planned investment.
II. Unemployment rises.
III. The price level will fall.
IV. The economy will experience a recessionary gap.
A) I and II
B) I and III
C) I, II, and III
D) I, II, III, and IV
Correct Answer:
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