Question: a. What is aggregate planned expenditure when real GDP is $6 billion? b. If real GDP is $4 billion, what is happening to inventories? c.

a. What is aggregate planned expenditure when real GDP is $6 billion?
b. If real GDP is $4 billion, what is happening to inventories?
c. If real GDP is $6 billion, what is happening to inventories?

The figure illustrates the components of aggregate planned expenditure on Turtle Island. Turtle Island has no imports or exports, no incomes taxes, and the price level is fixed.

Aggregate planned expenditure (billions of 2007 dollars) 8.0 6.0 5.6 bi ao 4.0 2.0 1.5 2.0 AE I + G 4.0 6.0 8.0 Real GDP (billions of 2007 dollars)

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