When actual investment is less than planned investment:
A)firms have sold less output than expected.
B)firms have sold more output than expected.
C)the quantity of output sold is the amount the firm expected to sell.
D)the economy produces short-run equilibrium output.

Question

Quizplus · Accepted Answer

When more goods are sold than were expected, inventory is depleted. Since changes in inventory are considered investment, reductions in inventory cause lower actual investment than was planned.

When Actual Investment Is Less Than Planned Investment