Firms in a small economy planned that inventories would grow over the past year by 500,000. Over that year, inventories did grow by exactly 500,000. This implies that
A) aggregate expenditure that year was equal to GDP that year.
B) there was an unplanned increase in inventories that year.
C) aggregate expenditure that year was greater than GDP that year.
D) there was an unplanned decrease in inventories that year.
Question 2
Refer to Figure 14-4. In a real world situation involving Rainbow Writer and Odeon, what scenario below might permit Rainbow Writer to rationally refuse an offer from Odeon of 40 per copy of the software package?
A) Odeon is considering new distribution outlets for its products.
B) Odeon hires a software developer to begin developing its own proprietary engraving software.
C) Odeon is also negotiating with FastWrite, Rainbow Writer's chief rival.
D) Odeon's competitors are also interested in bundling Rainbow Writer's software.
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