When spending falls short of output, additional inventories are created.

Name: When spending falls short of output, additional inventories are created.
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Question

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When spending falls short of output, the demand for goods and services decreases, which can lead to businesses producing more than what is actually being demanded. This results in an increase in inventories, which can be a costly burden for businesses as they must store and manage these excess goods.

When Spending Falls Short of Output, Additional Inventories Are Created