Answer
Because at C + Ig = GDP is where total spending = total output. When C+Ig exceeds GDP, the total spending will exceed total output. When C+Ig is less than GDP, this underspending will cause inventories to be in excess.
Work Step by Step
C + Ig > GDP: This excess in spending will cause inventories to fall below their planned level, prompting firms to adjust their production upward in the direction of the equilibrium GDP level. C + Ig < GDP: Prompts firms to readjust production downward in the direction of the GDP level.
