If aggregate expenditures exceed GDP in a private closed economy,
A) leakages will exceed injections.
B) planned investment will exceed saving.
C) unplanned investment in inventories will occur.
D) saving will exceed planned investment.

Question

Quizplus · Accepted Answer

When aggregate expenditures exceed GDP, it indicates that the total spending in the economy is greater than the total output, leading to a situation where planned investment exceeds saving. This results in businesses investing more than what is being saved, reducing inventories.

If Aggregate Expenditures Exceed GDP in a Private Closed Economy