When actual investment is less than planned investmentGroup of answer choicesfirms are selling more output than expected.autonomous expenditure is less than induced expenditure.the quantity of output sold is the amount the firm expected to sell.firms are selling less output than expected.the stock of inventories must increase.
Question
When actual investment is less than planned investmentGroup of answer choicesfirms are selling more output than expected.autonomous expenditure is less than induced expenditure.the quantity of output sold is the amount the firm expected to sell.firms are selling less output than expected.the stock of inventories must increase.
Solution
When actual investment is less than planned investment, the correct answer is: firms are selling less output than expected.
Here's the step by step explanation:
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Planned investment refers to the amount of goods and services a firm plans to produce and sell in a given period. This includes considerations of expected demand, production capacity, and other factors.
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Actual investment, on the other hand, refers to the amount of goods and services a firm actually ends up producing and selling in a given period. This can be influenced by a variety of factors, including unexpected changes in demand, production issues, and more.
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If actual investment is less than planned investment, this means that a firm has produced and sold less than it expected to. This could be due to lower than expected demand, production issues, or other factors.
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Therefore, the statement "firms are selling less output than expected" is correct. This is because the firm's actual sales (actual investment) are less than what it planned to sell (planned investment).
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The other statements are not necessarily true in this scenario. For example, the stock of inventories could increase or decrease depending on a variety of factors, and the relationship between autonomous and induced expenditure is not directly related to the difference between actual and planned investment.
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