When the excess capacity of business rises, aggregate:
A)demand increases.
B)demand decreases.
C)supply increases.
D)supply decreases.

Question

Quizplus · Accepted Answer

When the excess capacity of business rises, it means that businesses are producing more goods and services than there is demand for. This leads to a surplus of supply and therefore a decrease in demand, as businesses may have to lower prices to sell their excess inventory.

When the Excess Capacity of Business Rises, Aggregate