Note: Amounts in billions.
-Refer to the above table. If real GDP is $12 billion, total planned expenditures and unplanned inventory changes are respectively
A) $0 and $14 billion.
B) $13.2 billion and -$0.8 billion.
C) $12.4 billion and -$0.4 billion.
D) $12.4 billion and $0.4 billion.

Question

Note: Amounts in billions.
-Refer to the above table. If real GDP is $12 billion, total planned expenditures and unplanned inventory changes are respectively
A) $0 and $14 billion. 
B) $13.2 billion and -$0.8 billion. 
C) $12.4 billion and -$0.4 billion. 
D) $12.4 billion and $0.4 billion.

Quizplus · Accepted Answer

Total planned expenditures (Gross private domestic investment + Consumption + Government purchases) = $7.2 billion + $4 billion + $1.2 billion = $12.4 billion
Unplanned inventory changes = Real GDP - Total planned expenditures = $12 billion - $12.4 billion = -$0.4 billion. Therefore, the correct answer is C.

Note: Amounts in Billions