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-(Figure: Aggregate Expenditures and Real GDP) Use Figure: Aggregate Expenditures and Real GDP. If the level of real GDP equals $9,000 billion and there are no changes in the consumption function or in planned investment, then real GDP will _____in the next period.

Question

Use the following to answer questions: 
-(Figure: Aggregate Expenditures and Real GDP) Use Figure: Aggregate Expenditures and Real GDP. If the level of real GDP equals $9,000 billion and there are no changes in the consumption function or in planned investment, then real GDP will _____in the next period.

Quizplus · Accepted Answer

If real GDP is at $9,000 billion and there are no changes in the consumption function or planned investment, it implies that the economy is not at equilibrium. If aggregate expenditures are less than real GDP, inventories will rise, leading firms to reduce production, causing real GDP to fall in the next period.

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