Question

Actual investment spending in any period is equal to a. planned investment spending + unplanned inventor investment. b. planned investment spending - unplanned inventor investment. c. planned investment spending + inventory decreases d. unplanned inventory investment + inventory increases. e. unplanned inventory investment - inventory increases.

Name: Problem 5, Chapter 7: Macroeconomics in Modules
Uploaded: 2022-03-29T19:16:29-08:00
Duration: 1 min 22 s
Channel: Doris Bennett
Description: Actual investment spending in any period is equal to a. planned investment spending + unplanned inventor investment. b. planned investment spending - unplanned inventor investment. c. planned investment spending + inventory decreases d. unplanned inventory investment + inventory increases. e. unplanned inventory investment - inventory increases.

   Actual investment spending in any period is equal to
a. planned investment spending + unplanned inventor investment.
b. planned investment spending - unplanned inventor investment.
c. planned investment spending + inventory decreases
d. unplanned inventory investment + inventory increases.
e. unplanned inventory investment - inventory increases.

Macroeconomics in Modules

Paul Krugman, Robin… 3rd Edition

Chapter 7, Problem 5

Instant Answer

Solved by Expert Doris Bennett

03/29/2022

Step 1

Investment spending in an economy can be broken down into two main components: planned investment spending and unplanned inventory investment. Show more…

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Actual investment spending in any period is equal to a. planned investment spending + unplanned inventor investment. b. planned investment spending - unplanned inventor investment. c. planned investment spending + inventory decreases d. unplanned inventory investment + inventory increases. e. unplanned inventory investment - inventory increases.

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Key Concepts

Planned Investment Spending

This is the level of investment that firms intend to carry out, based on expected economic conditions and business plans. It includes allocations for new capital goods and projects that businesses have scheduled to pursue in the future.

Unplanned Inventory Investment

This occurs when actual sales differ from expectations, causing inventories to either unexpectedly accumulate or deplete. It reflects the unanticipated adjustments in a firm’s production relative to demand, impacting the overall measurement of investment.

Actual Investment Spending

This is the total expenditure on investment that occurs in an economy, incorporating both the intended planned expenditures and the unplanned changes in inventory levels. It provides a comprehensive measure of a firm’s investment behavior over a given period.

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