Question
In the aggregate expenditures model, if an economy operates below equilibrium GDP, there will be unplanned inventory depletion.
True
False
True
False
Answers
GPT-5 mini
True.
If actual GDP is below the equilibrium level, planned (aggregate) expenditures exceed current output, so firms sell more than they planned and inventories fall unexpectedly (unplanned inventory depletion).
If actual GDP is below the equilibrium level, planned (aggregate) expenditures exceed current output, so firms sell more than they planned and inventories fall unexpectedly (unplanned inventory depletion).