Unplanned investment occurs when
I. aggregate expenditures exceed real GDP produced.
II. aggregate expenditures fall short of real GDP produced.
III. when real GDP produced is less than potential real GDP.
IV. when real GDP produced is greater than potential real GDP.
A) I and II only
B) I and IV only
C) II and III only
D) I, II, III, and IV

Question

Quizplus · Accepted Answer

Unplanned investment occurs when aggregate expenditures fall short or exceed real GDP produced. Options III and IV are incorrect as they refer to potential real GDP, which is not a factor in determining whether unplanned investment has occurred or not.

Unplanned Investment Occurs When