If total spending is less than total output, then price levels will

Question

Quizplus · Accepted Answer

If total spending is less than total output, it means that there is not enough demand for the goods and services produced. This situation can lead to excess supply and prices falling. As prices fall, firms may reduce their output due to lower profitability, leading to a decrease in overall output. Therefore, option D, which states that prices will fall and output will decrease, is the best choice.

If Total Spending Is Less Than Total Output, Then Price