If planned aggregate expenditure is less than real GDP,some firms will experience unplanned increases in inventories.

Question

Quizplus · Accepted Answer

If planned aggregate expenditure is less than real GDP, it means that there is a gap between what consumers, businesses, and governments want to spend on goods and services and the actual level of production in the economy. As a result, some firms will be left with unsold goods, leading to unplanned increases in inventories.

If Planned Aggregate Expenditure Is Less Than Real GDP,some Firms