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

Question

Quizplus · Accepted Answer

If actual investment is greater than planned investment at the current level of output, it means that firms have invested more than they originally intended to. This implies that their stock of inventories must have increased, as they produce more than they are currently selling. Therefore, choice B is the correct answer, while choices A, C, and D do not necessarily follow from this information.

Supposed Actual Investment Is Greater Than Planned Investment at the Current