Consumption is $5 million, planned investment spending is $8 million, government purchases are $10 million, and net exports are equal to $2 million. if gdp during that same time period is equal to $27 million, what unplanned changes in inventories occurred?

The answer is: There was an unplanned increase in inventories of $2 million

Explanation:

To determine what unplanned changes might have happened to inventories (which is part of the total investment component) we must subtract all the other components form the total GDP.

GDP = consumption + (planned investment + inventories) + government + net exports

inventories = GDP - (consumption + planned investment + government + net exports)

So inventories increased by $2 million

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