If total intended spending precisely equals GDP
A) inflation soars.
B) consumer spending begins to decline.
C) expected rates of return exceed interest rates.
D) unemployment rises.
E) GDP tends to remain unchanged.

Question

Quizplus · Accepted Answer

Total intended spending equaling GDP means that all goods and services produced in the economy are being purchased, which implies that demand and supply are in balance. This equilibrium leads to a stable level of GDP, and there would be no tendency for inflation, declining consumer spending, rising unemployment, or expected rates of return exceeding interest rates.

If Total Intended Spending Precisely Equals GDP