In the short-run macro model,if GDP = $5 trillion and aggregate expenditure = $4.6 trillion,we would expect
A) prices to fall until the additional $0.4 trillion of output was sold
B) prices to rise
C) output to rise because businesses anticipate that buyers will spend more in the future to compensate for weak spending in this period
D) inventories to rise by $0.4 trillion
E) inventories to shrink by $0.4 trillion

Question

Quizplus · Accepted Answer

When aggregate expenditure is less than GDP, unsold goods accumulate, leading to an increase in inventories.

In the Short-Run Macro Model,if GDP = $5 Trillion and Aggregate