If economists forecast a decrease in aggregate expenditure,which of the following is likely to occur?
A)GDP will rise.
B)GDP will fall.
C)Wages will rise.
D)Inventories will fall.

Question

Quizplus · Accepted Answer

A decrease in aggregate expenditure indicates a decrease in overall spending in the economy, which is likely to result in a decrease in GDP. Additionally, if spending decreases, businesses may find themselves with excess inventory, leading to a potential decrease in production and/or employment levels. Wage increases are not necessarily related to changes in aggregate expenditure.

If Economists Forecast a Decrease in Aggregate Expenditure,which of the Following