If economists forecast an increase in aggregate expenditure,which of the following is likely to occur?
A)GDP will rise.
B)GDP will fall.
C)Wages will fall.
D)Inventories will rise.

Question

Quizplus · Accepted Answer

An increase in aggregate expenditure means that there is more demand for goods and services which in turn will increase production and boost GDP. Therefore, GDP will rise. Option B is not likely as an increase in aggregate expenditure means that there is more demand for goods and services which will lead to increased production and a consequent increase in GDP. Option C is not applicable as wages are not directly related to aggregate expenditure. Option D is also not likely as an increase in aggregate expenditure will lead to increased production and sales, reducing any inventory buildup.

If Economists Forecast an Increase in Aggregate Expenditure,which of the Following