In a Keynesian income model, if a country's actual level of income is above the Equilibrium income level, then there will be an __________ of inventories of firms and, Consequently, firms will __________ their level of output.

Question

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If a country's actual level of income is above the equilibrium level, it means that the output level is higher than the level of aggregate expenditure. This leads to unintended accumulation of inventories of firms as they cannot sell all their production. Consequently, firms will decrease their level of output to avoid overproduction and accumulation of unsold inventories.

In a Keynesian Income Model, If a Country's Actual Level