Planned investment is $20 billion and saving is $15 billion when GDP in the economy is $180 billion. The economy is:
A) At the equilibrium level of GDP
B) In disequilibrium and its GDP will increase
C) In disequilibrium and its GDP will decrease
D) Having a GDP level that is greater than its aggregate expenditures

Question

Quizplus · Accepted Answer

Planned investment is higher than saving by $5 billion, meaning there is a deficiency in demand or an unplanned inventory accumulation. This indicates that the economy is in disequilibrium and its GDP will increase to meet the excess demand caused by the gap between planned investment and saving.

Planned Investment Is $20 Billion and Saving Is $15 Billion