-Consider the above figure. At a price level of 120
A) total planned real expenditures exceed total planned production.
B) total planned production exceeds total planned expenditures.
C) prices would fall.
D) inventories would begin to accumulate.

Question

-Consider the above figure. At a price level of 120
A) total planned real expenditures exceed total planned production. 
B) total planned production exceeds total planned expenditures. 
C) prices would fall. 
D) inventories would begin to accumulate.

Quizplus · Accepted Answer

Total planned real expenditures exceed total planned production at a price level of 120. This is because the aggregate expenditure curve (AE) is above the aggregate output curve (AO) at this price level.

-Consider the Above Figure