In the short-run macro model,planned investment is defined as
A) plant and equipment purchases by business firms plus inventory changes
B) plant and equipment purchases by business firms plus new home construction
C) plant and equipment purchases by business firms
D) new home construction plus inventory changes
E) inventory changes

Question

Quizplus · Accepted Answer

Planned investment in the short-run macro model includes plant and equipment purchases by business firms and new home construction, as these are considered planned expenditures by businesses and households.

In the Short-Run Macro Model,planned Investment Is Defined as