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

Question

Quizplus · Accepted Answer

When planned aggregate expenditure exceeds real GDP, inventories fall below their target as businesses sell more than they produce, prompting them to increase production, which leads to an increase in real GDP.

If Real GDP Is $13 Billion and Planned Aggregate Expenditure