Suppose that at a particular level of real GDP,the unintended change in inventories is zero.Which of the following is true?
A)That level of real GDP is less than the equilibrium level of real GDP demanded.
B)That level of real GDP is greater than the equilibrium level of real GDP demanded.
C)That level of real GDP is the equilibrium level of real GDP demanded.
D)At that level of real GDP,there is no inflation.
E)At that level of real GDP,there is no saving.

Question

Quizplus · Accepted Answer

When unintended change in inventories is zero, it means that aggregate demand equals aggregate supply i.e. there is no surplus or shortage of goods in the market. This implies that the level of real GDP is at the equilibrium level where the quantity demanded equals the quantity supplied. Therefore, the correct answer is (C) - That level of real GDP is the equilibrium level of real GDP demanded.

Suppose That at a Particular Level of Real GDP,the Unintended