When aggregate production is less than aggregate expenditures,
A. the economy is in equilibrium.
B. there are decreases in inventory.
C. total output will decrease.
Answer: C. total output will decrease.
(If aggregate expenditures are less than the level of real GDP, firms will reduce their output and real GDP will fall. If aggregate expenditures exceed real GDP, then firms will increase their output and real GDP will rise.)
You might also like to view...
Why would a firm continue to pollute even when it is fined (taxed) for doing so?
What will be an ideal response?
Which of the following countries meets or exceeds the U.N.'s Millennium Aid Goal of 0.7 percent of donor country GDP?
A. The United Kingdom. B. Australia. C. Norway. D. Japan.
For a nation to have sustained economic growth, it must ______.
a. decrease its reliance on natural resources b. decrease its rate of population growth c. increase the output per average worker d. increase its exports
Assume the minimum wage exceeds the market-clearing wage. If there is an increase in the supply of labor then the number of workers who are unemployed will ________, and the number of workers who are employed will ________.
A. increase; not change B. increase; increase C. decrease; increase D. increase; decrease