If aggregate expenditures are less than current output
A) businesses will cut back on output.
B) businesses will produce more.
C) employment will rise.
D) inflation results.

Question

Quizplus · Accepted Answer

If aggregate expenditures are less than current output, it means that there is an oversupply of goods and services in the market. To clear out the excess inventory, businesses will cut back on output. This can lead to a decrease in employment and a slowing down of the economy. Inflation is not a result of this situation.

If Aggregate Expenditures Are Less Than Current Output