Real GDP equals $20 billion and aggregate planned expenditure is $30 billion. There is an unplanned ________ in inventories of ________ and real GDP will ________.
A) increase; $10 billion; increase
B) increase; $50 billion; decrease
C) decrease; $10 billion; increase
D) decrease; $10 billion; decrease

Question

Quizplus · Accepted Answer

When aggregate planned expenditure exceeds real GDP, there is a decrease in inventories because more goods are being purchased than produced, leading to an increase in real GDP as production ramps up to meet demand.

Real GDP Equals $20 Billion and Aggregate Planned Expenditure Is