If aggregate expenditures equal $6,200 and aggregate income equals $5,800, businesses will produce
A) more, raising both employment and income.
B) less, lowering both employment and income.
C) more, raising employment and lowering income.
D) less, lowering employment and raising income.

Question

Quizplus · Accepted Answer

When aggregate expenditures exceed aggregate income, it indicates that there is more demand than the current supply. Businesses will respond by increasing production to meet this higher demand, which will lead to higher employment and income as they hire more workers and possibly pay higher wages to meet the production needs.

If Aggregate Expenditures Equal $6,200 and Aggregate Income Equals $5,800