If planned aggregate expenditure is less than total production
A)actual inventories will equal planned inventories.
B)firms will experience an unplanned increase in inventories.
C)GDP will increase.
D)the economy is in equilibrium.

Question

Quizplus · Accepted Answer

If planned aggregate expenditure is less than total production, it means that firms are producing more than what is being demanded in the market. This leads to an unplanned increase in inventories as firms fail to sell all of their produced goods. Therefore, Option B is the correct answer.

If Planned Aggregate Expenditure Is Less Than Total Production