If unplanned inventory investment is negative, then
A) planned investment must be zero.
B) planned aggregate spending must be greater than aggregate output.
C) planned aggregate spending must be less than aggregate output.
D) planned aggregate spending must equal aggregate output.

Question

Quizplus · Accepted Answer

When unplanned inventory investment is negative, it means that actual sales were higher than expected, leading to a decrease in inventories. This situation occurs because planned aggregate spending (or demand) is greater than the actual aggregate output (or supply).

If Unplanned Inventory Investment Is Negative, Then