Other things equal,if planned investment spending is less than actual investment spending,then aggregate expenditure will be ________ real GDP and employment will ________.
A) greater than; increase
B) greater than; decrease
C) less than; increase
D) less than; decrease

Question

Quizplus · Accepted Answer

Planned investment spending refers to the projected or intended investment spending, while actual investment spending is the realized or actual investment spending. If actual investment spending is greater than planned investment spending, aggregate expenditure will be greater than the planned level, leading to an increase in real GDP and employment. However, if planned investment spending is less than actual investment spending, aggregate expenditure will be less than the actual level, leading to a decrease in real GDP and employment. Therefore, option D is the correct answer.

Other Things Equal,if Planned Investment Spending Is Less Than Actual