If total production is greater than total expenditures,
A) there will be an increase in saving.
B) there will be an increase in inventories.
C) firms will then increase production.
D) firms will then increase prices.

Question

Quizplus · Accepted Answer

When total production exceeds total expenditures, it means that not all goods produced have been sold, leading to an increase in inventories as unsold goods accumulate.

If Total Production Is Greater Than Total Expenditures