Assume that in Narnia, planned investment is $80 billion but actual investment is $50 billion. Unplanned inventory investment is
A) -$150 billion.
B) -$30 billion.
C) $65 billion.
D) $150 billion.

Question

Quizplus · Accepted Answer

Planned investment - Actual investment = Unplanned inventory investment
$80 billion - $50 billion = $30 billion of unplanned inventory investment
However, since the actual investment is less than the planned investment, that means there was an overproduction of goods, which resulted in excess inventory. Therefore, the unplanned inventory investment is negative: -$30 billion.

Assume That in Narnia, Planned Investment Is $80 Billion but Actual