Whenever total planned expenditures differ from real GDP
A) unplanned inventories will remain unchanged.
B) unplanned inventories will change.
C) government spending will adjust.
D) tax revenues will move the economy back to equilibrium.

Question

Quizplus · Accepted Answer

Whenever total planned expenditures differ from real GDP, businesses will either build up unplanned inventories (if planned expenditures are lower than real GDP) or sell down unplanned inventories (if planned expenditures are higher than real GDP). Therefore, unplanned inventories will change.

Whenever Total Planned Expenditures Differ from Real GDP