Use the Following to Answer Questions

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 $500 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.