Supposed actual investment is greater than planned investment at the current level of output in 2010. Given this information, we know that
A)GDP will tend to increase over time.
B)firms' stock of inventories must have increased unexpectedly in 2010.
C)saving must be less than planned investment.
D)saving must be equal to planned investment.

Question

Quizplus · Accepted Answer

Actual investment being greater than planned investment means that firms have invested more than they intended to at the current level of output. This suggests that production has exceeded demand or there has been an unexpected increase in inventories. Option B suggests that firms' stock of inventories has increased unexpectedly in 2010 which caused the actual investment to exceed planned investment. Options A, C, and D do not necessarily follow from the given information.

Supposed Actual Investment Is Greater Than Planned Investment at the Current