If the economy finds itself at a point where planned spending is less than output, then we will expect to see:

Name: If the economy finds itself at a point where planned spending is less than output, then we will expect to see:
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Question

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If planned spending is less than output, then firms are producing more goods than consumers are willing to purchase, resulting in an increase in inventories. Therefore, the correct choice is D - an increase in inventories.

If the Economy Finds Itself at a Point Where Planned