If the Level of Real GDP Is $4 Trillion While

question 69

Multiple Choice

If the level of real GDP is $4 trillion while aggregate planned expenditure is $5 trillion, then

• A) aggregate planned expenditure decreases to reach the equilibrium of $4 trillion.
• B) inventories rise more than planned, leading firms to cut production.
• C) inventories fall more than planned, leading firms to increase production.
• D) real GDP increases and planned expenditure decreases reaching equilibrium in the middle.
• E) inventories rise more than planned, leading firms to increase production.

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