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The graph models an economy in equilibrium with a real GDP of $180 billion. Suppose that consumers expectations about future
Planned aggregate spendin 0 30 60 90 120 150 180 210 Real GDP billions of dollars) 240 270 300 This change will cause the equ
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Planned aggregate expenditure is defined as planned level of investment plus total consumption. In other words it is the planned level of goods and services in the economy. Unplanned inventory increases by 30billion dollar, which means the planned AE curve will shift down as shown: 45° line Planned aggregate spending (billions of dollars) New planned AE Planned AE 0 30 240 270 300 60 90 120 150 180 210 Re

The change will cause the equilibrium level of the Real GDP to decrease.

GDP changes by -60billion dollars

GDP changes by : New Gdp-Previous GDP => $120billion - $180billion = -60billion dollars.

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