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

Question

Quizplus · Accepted Answer

If aggregate output equals planned aggregate expenditure, it means that firms are able to sell all of their output, and there is no need for unplanned inventory adjustment. Therefore, unplanned inventory investment is zero.

If Aggregate Output Equals Planned Aggregate Expenditure, Then