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The Aggregate Expenditure Model (Private closed economy) Created by John…

- - - - GDP > C + Ig
        
        Surplus inventories
        -Firms cut production
        -Job loses
        -decline in total
        income
        -Spending insufficient
        to permit sale of all
        output
        -total output fail to
        generate the Spending
        needed to clear
        shelves
      - GDP <C +Ig
        -buyers taking goods off the shelves faster than production
        -unplanned decline in inventories
        -firms increases production to reach equilibrium
        
        greater output increases employment
        -total income increases
        
        Spending exceeds GDP