When GDP is at its equilibrium value
A) firms' inventories will neither increase nor decrease unexpectedly.
B) employment and GDP are identical.
C) the multiplier is zero.
D) intended investment equals the 45-degree line.
E) consumption equals disposable income.

Question

Quizplus · Accepted Answer

When GDP is at its equilibrium value, firms' inventories will neither increase nor decrease unexpectedly because total production equals total planned spending, preventing unplanned inventory changes.

When GDP Is at Its Equilibrium Value