If aggregate planned expenditure is less than real GDP, in the short run
A) exports change to restore equilibrium.
B) real GDP will decrease.
C) the price level will fall.
D) aggregate planned expenditure will increase.

Question

Quizplus · Accepted Answer

If aggregate planned expenditure is less than real GDP, it means that there is excess supply in the market. Firms will then reduce their production, which leads to a decrease in real GDP in the short run.

If Aggregate Planned Expenditure Is Less Than Real GDP, in the Short