If total production (TP)is less than total expenditures (TE),it follows that
A) optimum inventory levels fall.
B) firms have underproduced.
C) firms increase the quantity of goods they produce.
D) b and c
E) a,b,and c

Question

Quizplus · Accepted Answer

If TP is less than TE, it implies that demand (reflected by expenditures) exceeds supply (production), suggesting firms have underproduced (B) and would likely increase production (C) to meet demand.

If Total Production (TP)is Less Than Total Expenditures (TE),it Follows