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Semenov [28]
3 years ago
15

If aggregate planned expenditures in the economy increase by $100 million, then real GDP will _____ $100 million.

Business
1 answer:
nirvana33 [79]3 years ago
6 0

Answer:

Real GDP will rise by $100 million

Explanation:

Aggregate Demand [AD] is total amount of goods & services, all sectors of an economy are planning to buy . So AD = Aggregate Planned Expenditure [APE]

Aggregate Supply [AS] is total amount of goods & services, all sellers are planning to sell. As total output value of goods & services produced is distributed among factors of production, AS = National Income [NY] = GDP

At equilibrium : AD or APE =  AS or NY or GDP

If AD or APE increases by $100 million :

AD or APE  > AS or Aggregate Planned Production or GDP . This implies willingess to buy > willingness to produce. So, inventory levels will fall below desired level. To mantain inventory level, production [AS] & income level [GDP] will rise till it becomes equal to risen AD or APE

So, GDP will also rise by $100 million

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Learn more about holdover tenancy here

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Bond issuance: 20% of total funds, requires 15% interest per year Bank loan: 60% of total funds, requires 9.5% interest per year
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