-The above table gives data for the nation of Mouseville. There are no imports into or exports from Mouseville. Aggregate planned expenditure is less than actual expenditure if real GDP is
A) less than $800 billion.
B) more than $800 billion.
C) less than $700 billion.
D) $800 billion.
E) more than $700 billion.

Question

-The above table gives data for the nation of Mouseville. There are no imports into or exports from Mouseville. Aggregate planned expenditure is less than actual expenditure if real GDP is
A) less than $800 billion. 
B) more than $800 billion. 
C) less than $700 billion. 
D) $800 billion. 
E) more than $700 billion.

Quizplus · Accepted Answer

When aggregate planned expenditure is less than actual expenditure, it means that the actual output (or real GDP) is higher than what businesses anticipated, leading to an accumulation of unsold goods. This typically occurs when real GDP is more than the level at which planned expenditure equals actual expenditure. Without the specific table data, a general understanding is that if $800 billion is a point of equilibrium (where planned equals actual expenditure), then any real GDP above this ($800 billion) would result in actual expenditure exceeding planned expenditure.

-The Above Table Gives Data for the Nation of Mouseville