Which of the following does NOT occur as the economy moves from an expansion to a recession?
A) An initial decrease in autonomous spending is the trigger that creates the business cycle turning point.
B) The change in planned spending exceeds the change in real GDP.
C) The multiplier process reinforces any decrease in spending and pushes the economy into recession.
D) Incomes fall during recessions as firms cut production in response to unplanned increases in inventories.

Question

Quizplus · Accepted Answer

The change in planned spending does not necessarily exceed the change in real GDP as the economy moves from an expansion to a recession. The other options (A, C, D) describe processes or outcomes that can occur during this transition.

Which of the Following Does NOT Occur as the Economy