If firms sell what they expected to sell, which of the following will be true?
A)Aggregate expenditure will be greater than GDP.
B)There will be no unplanned change in inventories.
C)Inventories will rise and GDP and employment will fall.
D)Aggregate expenditure will be less than GDP.
E)Employment will rise.

Question

Quizplus · Accepted Answer

If firms sell what they expected to sell, there will be no unplanned change in inventories. This means that the goods produced will have been sold, and there won't be any excess inventory to store or sell later. Therefore, firms will have met their planned sales, and there won't be any inventory buildup or reduction.

If Firms Sell What They Expected to Sell, Which of the Following