$$\begin{array} { c c }
\begin{array} { c }
\text { Real GDP } \
\text { (billions of 2005 dollars) }
\end{array} & \begin{array} { c }
\text { Aggregate expenditure } \
\text { (billions of 2005 dollars) }
\end{array} \
\hline 10 & 10.50 \
11 & 11.25 \
12 & 12.00 \
13 & 12.75 \
14 & 13.50 \
15 & 14.25
\end{array}$$
-The above table gives real GDP and the aggregate expenditure schedule.When real GDP is $10 billion, the amount of unplanned investment is
A) -$0.5 billion.
B) $0.5 billion.
C) $20.5 billion.
D) -$20.5 billion.
E) unknown.

Question

$$\begin{array} { c c } 
\begin{array} { c } 
\text { Real GDP } \
\text { (billions of 2005 dollars) }
\end{array} & \begin{array} { c } 
\text { Aggregate expenditure } \
\text { (billions of 2005 dollars) }
\end{array} \
\hline 10 & 10.50 \
11 & 11.25 \
12 & 12.00 \
13 & 12.75 \
14 & 13.50 \
15 & 14.25
\end{array}$$
-The above table gives real GDP and the aggregate expenditure schedule.When real GDP is $10 billion, the amount of unplanned investment is
A) -$0.5 billion.
B) $0.5 billion.
C) $20.5 billion.
D) -$20.5 billion.
E) unknown.

Quizplus · Accepted Answer

The unplanned investment is the difference between aggregate expenditure and real GDP at each level of real GDP.

When real GDP is $10 billion, the aggregate expenditure is $10.5 billion. Therefore, the unplanned investment is:

Unplanned investment = Aggregate expenditure - Real GDP
Unplanned investment = $10.5 billion - $10 billion
Unplanned investment = $0.5 billion (negative unplanned investment would imply a higher level of actual investment than planned)

So, the correct answer is A) -$0.5 billion.

-The Above Table Gives Real GDP and the Aggregate Expenditure