In May 2023, the Bureau of Economic Analysis (BEA) issued a revised estimate of the change in real GDP during the first quarter of 2023. The BEA’s news release describing the revisions noted that “the updated estimates primarily reflected an upward revision to private inventory investment.”

a. Based on this information, is it likely that BEA revised its estimate of GDP upward or revised it downward? Briefly explain.

b. Did the BEA’s revised estimate of the change in inventories affect the estimated difference between total production and total demand in the economy? Briefly explain.