If aggregate expenditure is less than GDP,then inventories rise and GDP falls.

Name: If aggregate expenditure is less than GDP,then inventories rise and GDP falls.
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Question

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If aggregate expenditure is less than GDP, it means that households, businesses, and the government collectively spend less than the total output produced in the economy. As a result, businesses accumulate unsold goods in their inventories, which leads to a decrease in the level of production and ultimately lowers GDP.

If Aggregate Expenditure Is Less Than GDP,then Inventories Rise and GDP