If aggregate output is greater than planned spending, then
A) unplanned inventory investment is zero.
B) unplanned inventory investment is negative.
C) unplanned inventory investment is positive.
D) actual investment equals planned investment.

Question

Quizplus · Accepted Answer

If aggregate output is greater than planned spending, it means that total output is higher than the demand for goods and services. This results in unplanned inventory accumulation, meaning that businesses have produced more than they were able to sell. As a result, unplanned inventory investment is positive.

If Aggregate Output Is Greater Than Planned Spending, Then