Question
In the aggregate expenditures model, equilibrium occurs if:
aggregate expenditures (AE) are greater than GDP.
aggregate expenditures (AE) are less than GDP.
there is no unplanned inventory depletion or accumulation.
consumption equals investment.
aggregate expenditures (AE) are greater than GDP.
aggregate expenditures (AE) are less than GDP.
there is no unplanned inventory depletion or accumulation.
consumption equals investment.
Answers
GPT-5 mini
There is no unplanned inventory depletion or accumulation.
Explanation: In the AE model equilibrium is when planned aggregate expenditures (AE) equal actual output (GDP). That implies AE = Y and therefore no unplanned changes in inventories. If AE > Y, inventories fall (unplanned depletion); if AE < Y, inventories rise (unplanned accumulation).
Explanation: In the AE model equilibrium is when planned aggregate expenditures (AE) equal actual output (GDP). That implies AE = Y and therefore no unplanned changes in inventories. If AE > Y, inventories fall (unplanned depletion); if AE < Y, inventories rise (unplanned accumulation).