Lecture title - Adjustments between actual and planned spending

4 important questions on Lecture title - Adjustments between actual and planned spending

What happens when actual spending is less than planned spending?

In this case, unsold goods accumulate in inventories due to lower purchases.

What does it indicate when actual spending exceeds planned spending?

This results in inventory depletion as stock is sold more than anticipated.

Why do firms produce more than expected?

They anticipate higher sales, leading to potential unsold goods in inventories.
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What occurs when consumers buy more than firms expect?

Inventories will shrink significantly as stock runs out quicker than planned.

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