If unplanned inventory investment is zero
A) aggregate output equals planned aggregate expenditures.
B) aggregate output is greater than planned aggregate expenditures.
C) aggregate output is less than planned aggregate expenditures.
D) aggregate output is positive when planned aggregate expenditures are positive.

Question

Quizplus · Accepted Answer

When unplanned inventory investment is zero, it means that actual output is equal to planned aggregate expenditures. This is because there are no unplanned changes in inventory, which implies that firms are successfully selling their output, so there is no need to adjust production levels.

If Unplanned Inventory Investment Is Zero