When real GDP exceeds aggregate planned expenditure,
A)real GDP increases.
B)an unplanned increase in inventories occurs.
C)an unplanned decrease in inventories occurs.
D)firms increase production.
E)real GDP remains at its equilibrium.

Question

Quizplus · Accepted Answer

When real GDP exceeds aggregate planned expenditure, it means that consumers are not buying as much as firms are producing. This results in an unplanned increase in inventories, as firms are left with excess unsold goods.

When Real GDP Exceeds Aggregate Planned Expenditure