Complete Question:
An unanticipated decrease in aggregate demand when the economy is in equilibrium will result in
A. a decrease in voluntary unemployment
B. a decrease in the natural rate of unemployment
C. a decrease in aggregate supply
D. an increase in unplanned inventories
E. an increase in the rate of inflation
Answer:
Option D: An increase in unplanned inventories.
Explanation:
An economy can be said to be in a state of equilibrium when the aggregate supply matches the aggregate demand in the economy.
Unplanned inventories can be defined as the inventory that is left or remaining after deducting the inventory your need from the inventory you have.
When an economy in equilibrium experiences a sudden or unexpected decrease in aggregate demand, there would be an increase in unplanned inventories.
