When spending is greater than output, firms will experience falling inventories, and prices of goods and services will rise.

Name: When spending is greater than output, firms will experience falling inventories, and prices of goods and services will rise.
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Question

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When spending is greater than output, firms sell more than they produce, which causes a decrease in inventories. This leads to an increase in demand and prices of goods and services.

When Spending Is Greater Than Output, Firms Will Experience Falling