If planned aggregate expenditure in the economy is 400 and the level of national output is 250, then which of the following is true?
A) There will be excess demand for goods and services in the economy.
B) The unsold stocks of goods with ﬁrms will increase sharply.
C) Firms will have to reduce production since aggregate demand in the economy will fall.
D) The quantity of goods and services demanded in the economy will be equal to the quantity

Question

Quizplus · Accepted Answer

When planned aggregate expenditure (400) exceeds the level of national output (250), it indicates that the demand for goods and services is higher than what is being produced, leading to excess demand in the economy.

If Planned Aggregate Expenditure in the Economy Is 400 and the Level