When total production is greater than total expenditures,
A) the economy is in disequilibrium.
B) there are increases in inventory.
C) total output will decrease.
D) all of the above

Question

Quizplus · Accepted Answer

When total production exceeds total expenditures, it indicates an imbalance or disequilibrium in the economy (A), leading to increases in inventory as goods produced are not sold (B), and this situation can eventually cause a decrease in total output as businesses adjust production downward in response to the inventory build-up (C).

When Total Production Is Greater Than Total Expenditures