At the equilibrium level of real GDP, which of the following is true ?
A) Unplanned inventory investment is positive.
B) Unplanned inventory investment is negative.
C) Aggregate output equals aggregate expenditures.
D) Aggregate output plus consumption spending equals aggregate expenditures.

Question

Quizplus · Accepted Answer

At the equilibrium level of real GDP, aggregate output (which is also equal to aggregate supply) is equal to aggregate expenditures (which is also equal to aggregate demand). This means that there are no unplanned changes in inventories - meaning that businesses are producing the exact amount of goods that consumers are willing to purchase, and there is no excess supply or excess demand. Therefore, unplanned inventory investment is zero, and the correct answer is C.

At the Equilibrium Level of Real GDP, Which of the Following