Which of the following is correct if real GDP is $20.5 trillion and spending is $20 trillion?
A) Inventories increase by 0.5 trillion.
B) Inventories decrease by 0.5 trillion.
C) GDP increases by 0.5 trillion.
D) GDP decreases by 0.5 trillion.
E) Spending and GDP are in equilibrium.

Question

Quizplus · Accepted Answer

When real GDP exceeds spending, it indicates that not all goods produced were sold, leading to an increase in inventories by the difference, which is $0.5 trillion in this case.

Which of the Following Is Correct If Real GDP Is