"Few if any economists anticipated the extent of the inventory adjustment... Production cutbacks have been much greater than expected. Those cuts have weakened the industrial sector considerably." As a result of these changes, the U.S. government lowered its estimate of fourth-quarter growth in real GDP. www.businessweek.com 3/12/2007
The article suggests that
A) planned expenditures exceeded real GDP in 2006.
B) real GDP exceeded planned expenditures in 2006.
C) the AE curve shifted upward in 2007.
D) the AD curve shifted rightward in 2007.

Question

Quizplus · Accepted Answer

The article indicates that production cutbacks were greater than expected, suggesting that real GDP exceeded planned expenditures, leading to an inventory adjustment.

"Few If Any Economists Anticipated the Extent of the Inventory