Thank you for visiting Which of the following situations leads to an unplanned increase in inventories of 2 0 trillion A Real GDP 5 0 trillion and aggregate planned. This page is designed to guide you through key points and clear explanations related to the topic at hand. We aim to make your learning experience smooth, insightful, and informative. Dive in and discover the answers you're looking for!
Answer :
Answer: C. real GDP = $6.0 trillion and aggregate planned expenditures = $4.0 trillion
Explanation:
Unplanned Inventory arises when Real GDP is larger than Planned Expenditure because it must satisfy the below formula,
Real GDP = Planned + Unplanned expenditure
For Option C,
Real GDP = 6.0 trillion,
Planned expenditure = 4.0 trillion
Unplanned Expenditure = Real GDP - Planned Expenditure
= $6.0 trillion - $4.0 trillion
= $2.0 trillion
Therefore Option C is correct as it led to a $2.0 trillion increase in Expenditure which translates to inventory.
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Rewritten by : Jeany
