For firms or individual households in the simple macro model,which of the following statements is correct? Desired expenditure is
A)always greater than planned expenditure.
B)always greater than actual expenditure.
C)not relevant because human wants are unlimited.
D)what they plan on spending,given the resources at their command.
E)not a useful concept because it cannot be measured.

Question

Quizplus · Accepted Answer

Desired expenditure refers to what firms or individual households plan on spending, given the resources they have. It is a useful concept as it helps in understanding and predicting the behavior of these economic agents. Option A and B are incorrect as desired expenditure may be less than or equal to planned/actual expenditure. Option C is irrelevant to the concept of desired expenditure. Option E is also incorrect as desired expenditure can be measured through surveys and other methods.

For Firms or Individual Households in the Simple Macro Model,which