In the aggregate expenditures model, if aggregate expenditures (AE)are less than GDP, then:
A)inventory is depleted.
B)inventory is accumulated.
C)inventory is unchanged.
D)employment increases.

Question

Quizplus · Accepted Answer

When aggregate expenditures are less than GDP, it means that not all goods produced are being sold, leading to an accumulation of inventory.

In the Aggregate Expenditures Model, If Aggregate Expenditures (AE)are Less