In the aggregate expenditures model, if an economy operates above equilibrium GDP, there will be:
A)unplanned inventory accumulation.
B)unplanned inventory depletion.
C)an increase in GDP.
D)an increase in employment.

Question

Quizplus · Accepted Answer

When an economy operates above equilibrium GDP, production exceeds aggregate expenditures, leading to unplanned inventory accumulation as goods are produced but not sold.

In the Aggregate Expenditures Model, If an Economy Operates Above