Unplanned inventories increase when
A)actual aggregate expenditure is less than GDP.
B)actual aggregate expenditure is greater than aggregate planned expenditure.
C)actual aggregate expenditure is equal to GDP.
D)aggregate planned expenditure is less than GDP.
E)real GDP is less than aggregate planned expenditure.

Question

Quizplus · Accepted Answer

Unplanned inventories occur when actual aggregate expenditure is less than aggregate planned expenditure, which is represented by choice D. This means that businesses produced more goods and services than were actually consumed or invested in, leading to an increase in unsold inventory.

Unplanned Inventories Increase When