1.Suppose the level of planned aggregate expenditure in a simple economy (No government, closed economy, interest rates and prices are fixed) is $800 and real GDP is $900. According to Keynesian-Cross Model.

a)Unplanned decreases in inventories are occurring and Real GDP will start to rise

b)Inventories are unaffected and will remain at the planned inventory level.

c)Unplanned increases in inventories are occurring and Real GDP will start to fall

d)The economy continues to produce the same level of output (Real GDP)