If aggregate planned expenditure exceeds real GDP,
A) actual inventories decrease below their target.
B) planned investment is greater than planned savings.
C) firms are not maximizing their profits.
D) planned consumption expenditure is less than actual consumption expenditure.

Question

Quizplus · Accepted Answer

If aggregate planned expenditure exceeds real GDP, it means that firms are selling more goods and services than they had planned for. This leads to a decrease in actual inventories below their target, as firms are unable to meet the unexpected demand and may run out of stock.

If Aggregate Planned Expenditure Exceeds Real GDP