Asked by Tyler Thompson on Jun 10, 2024

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If planned spending exceeds planned output in an economy,the result is a(n) _____.

A) increase in inventories
B) decrease in gross domestic product
C) decrease in imports
D) increase in government purchases
E) unintended decrease in inventories

Planned Spending

Planned or budgeted expenditures by individuals, companies, or governments anticipated over a certain period.

Planned Output

The expected or targeted level of production set by a company or economy, often based on demand forecasts and capacity planning.

Inventories

The total amount of goods and materials held by a company or business in anticipation of sale or completion.

  • Interpret the effects of changes in aggregate expenditure components on GDP.
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Harman GahouriaJun 17, 2024
Final Answer :
E
Explanation :
When planned spending exceeds planned output, businesses sell more than they anticipated, leading to an unintended decrease in inventories as they have not produced enough goods to meet the unexpected higher demand.