In the aggregate expenditures model, if an economy operates below equilibrium GDP, there will be:
A)unplanned inventory depletion.
B)unplanned inventory accumulated.
C)a decrease in GDP.
D)a decrease in employment.

Question

Quizplus · Accepted Answer

When an economy operates below equilibrium GDP, it means that actual spending is greater than what is being produced, leading to unplanned inventory depletion as businesses sell more than they anticipated.

In the Aggregate Expenditures Model, If an Economy Operates Below