If at the current real GDP, the economy has unplanned inventories, which of the following events occurs?
Aggregate planned expenditure

Question

If at the current real GDP, the economy has unplanned inventories, which of the following events occurs? 
 Aggregate planned expenditure

Answer

exceeds real GDP, so firms cut production.

Answer

is less than real GDP, so firms decrease investment.

Answer

is less than real GDP, so firms cut production.

Answer

exceeds real GDP, so firms increase production.

Answer

is less than real GDP, so firms increase production.

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