Use the Following to Answer Questions

question 128

Multiple Choice

Use the following to answer questions
Exhibit: Aggregate Expenditures (AE)
in a Simplified Economy

-(Exhibit: Aggregate Expenditures (AE)
In a Simplified Economy)
Consider a simple economy that is made up of only two sectors, households and firms, and that investment is autonomous.Further, disposable personal income = real GDP.Suppose that actual real GDP in this economy is $300 billion in a particular period.We would expect to see

• A)unintended reductions in inventory, planned investment will exceed actual investment.
• B)unintended reductions in inventory, planned investment will be less than actual investment.
• C)unintended increases in inventory, planned investment will exceed actual investment.
• D)unintended increases in inventory, planned investment will be less than actual investment.