If real GDP exceeds aggregate planned expenditure, what happens to a firm's unplanned inventories?
What will be an ideal response?
If real GDP exceeds aggregate planned expenditure, firms are producing more goods and services than households, firms, and governments are planning to buy. As a result, firms will not be able to sell all of their production. The unsold amounts will wind up in their inventories and so unplanned inventory increases.
Economics
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