If Y

Name: If Y < AE: A)planned investment will decrease in the economy. B)prices must be falling in the economy. C)managers will respond by ramping up production. D)managers will respond by lowering production.
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Question

If Y < AE:
A)planned investment will decrease in the economy.
B)prices must be falling in the economy.
C)managers will respond by ramping up production.
D)managers will respond by lowering production.

Quizplus · Accepted Answer

When Y (actual output) is less than AE (aggregate expenditure), it indicates that demand is higher than the current production level. Managers typically respond to this situation by increasing production to meet the higher demand.