-Use the figure above to answer this question. At a price level of 90
A) people will be forced to cut consumption so that aggregate demand will decrease.
B) the aggregate quantity demanded exceeds real GDP and inventories will decrease.
C) inventories increase and firms will increase production.
D) the aggregate quantity demanded exceeds real GDP, inventories increase and the price level will rise.

Question

-Use the figure above to answer this question. At a price level of 90
A) people will be forced to cut consumption so that aggregate demand will decrease. 
B) the aggregate quantity demanded exceeds real GDP and inventories will decrease. 
C) inventories increase and firms will increase production. 
D) the aggregate quantity demanded exceeds real GDP, inventories increase and the price level will rise.

Quizplus · Accepted Answer

At a price level of 90, if the aggregate quantity demanded exceeds the real GDP, it means that consumers are demanding more goods and services than what is currently being produced. This situation leads to a decrease in inventories as firms sell more than they are producing, indicating choice B is correct. Choices A, C, and D describe scenarios that do not align with the consequences of demand exceeding supply at a given price level.

-Use the Figure Above to Answer This Question