If aggregate planned expenditures equal real GDP,then
A)inventories decrease below their planned levels and businesses increase their production.
B)unplanned inventory changes equal zero.
C)inventories decrease below their planned levels and businesses decrease their production.
D)inventories increase above their planned levels and businesses decrease their production.
E)there is no equilibrium level of real GDP.

Question

Quizplus · Accepted Answer

When aggregate planned expenditures equal real GDP, the economy is in a state of equilibrium, and unplanned inventory changes equal zero. This means that businesses are producing the exact amount of goods and services that are being bought by consumers, and there are no unexpected changes in inventory levels. Therefore, the correct answer is B.

If Aggregate Planned Expenditures Equal Real GDP,then