When spending is equal to output and the economy has reached spending balance, inventory investment must equal zero. Please answer true or false, and explain.

Name: When spending is equal to output and the economy has reached spending balance, inventory investment must equal zero. Please answer true or false, and explain.
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Question

Quizplus · Accepted Answer

If spending is equal to output as given by spending balance, then there are no unintended changes to inventory. Firms can still have planned increases or decreases in inventory.

When Spending Is Equal to Output and the Economy Has