In the Keynesian model, when total spending in the economy is less than total production, business inventories:
A) increase.
B) decrease.
C) remain unchanged.
D) decrease at first and then remain unchanged.

Question

Quizplus · Accepted Answer

When total spending in the economy is less than total production, businesses end up with unsold goods, leading to an increase in inventories.

In the Keynesian Model, When Total Spending in the Economy