When the change in unplanned inventories is positive, then
A) real GDP is less than aggregate planned expenditure.
B) real GDP equals aggregate planned expenditure.
C) real GDP is larger than aggregate planned expenditure.
D) economic growth will occur as the economy returns to equilibrium.
E) planned inventories will increase in order to return to equilibrium.

Question

Quizplus · Accepted Answer

When the change in unplanned inventories is positive, it indicates that actual production (real GDP) exceeded what was planned to be sold (aggregate planned expenditure), leading to an accumulation of unsold goods.

When the Change in Unplanned Inventories Is Positive, Then