Question

UUALTAIMNIR W SUER Chapter 13 Homework Acme Manufacturing is producing $4,010,000 worth of goods this year and expects to sell its entire production. It also is planning to purchase $1,500,000 in new equipment during the year. At the beginning of the year, the company has $500,000 in inventory in its warehouse. Find actual investment and planned investment if: Instructions: Enter your responses a whole numbers a. Acme actually sells 33,850,000 worth of good E Acme actually sell 54,200,000 worth of goods IS I S Assuming that Acme's situation is similar to that of other forms, in which of these three cases is output equal to short-run equilibrium Output? Caseb Case o close None

Answer 1

Solution:-

(a). The unplanned investment = Producing Goods - Sells the goods

                              = $4,010,000 - $3,850,000

                              = $1, 60,000

Actual Investment = Planned Investment + Unplanned Investment

                                  = $15, 00,000 + $1,60,000

                                  = $16, 60,000

(b). The unplanned investment = Producing Goods - Sells the goods

                              = $4,010,000 - $40,000,000

                              = $10,000

Actual Investment = Planned Investment + Unplanned Investment

                  = $15, 00,000 + $10,000

                  = $15, 10,000

(c). The unplanned investment = Producing Goods - Sells the goods

                              = $4,010,000 - $42,000,000

                              = -$1,90,000

Actual Investment = Planned Investment + Unplanned Investment

                  = $15,00,000 - $1,90,000

                  = $13,10,000

The answer is Option (D) None

Out of these three cases, None case output is equal to short-run equilibrium output. These are because in this cases the planned investment is not equal to actual investment.