If real GDP is $13 trillion and planned aggregate expenditure is $13.5 trillion, inventories will be
A) below their target and real GDP will decrease.
B) above their target and real GDP will increase.
C) below their target and real GDP will increase.
D) above their target and real GDP will decrease.

Question

Quizplus · Accepted Answer

When planned aggregate expenditure exceeds real GDP, inventories fall below their target levels, prompting firms to increase production, which leads to an increase in real GDP.

If Real GDP Is $13 Trillion and Planned Aggregate Expenditure