If aggregate planned expenditure equals GDP,then
A)firms' inventories exceed planned inventories.
B)firms' inventories equal planned inventories.
C)firms' inventories are less than planned inventories.
D)firms' actual investment has no relationship to its planned investment.
E)firms do not have any inventories.

Question

Quizplus · Accepted Answer

When aggregate planned expenditure equals GDP, it means that firms' production (GDP) matches the overall demand for goods and services (aggregate planned expenditure), which implies that firms have been successful in meeting their planned sales. Therefore, firms' inventories would be at the planned level, which is option B.

If Aggregate Planned Expenditure Equals GDP,then