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CH9-28.04.09 - AE=GDP increase in inventories Actual...

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28.04.2009 CHAPTER 9 BUILDING THE AGREEGATE EXPENDITURES MODEL Equilibrium GDP 2. Leakages and Injections Approach DI1, I>S →AE>DI DI2, I<S →AE<DI DI3, I=S →AE=DI Planned versus Actual Investment AE>GDP, decrease in inventories. AE=GDP + decrease in inventories. AE<GDP, increase in inventories.
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Unformatted text preview: AE=GDP - increase in inventories. Actual Investment = Planned Investment + Increase (or decrease) in inventories. So, actual investments always equal savings. Planned Investments + Increase in inventories = Actual Investment = Savings...
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