If the current price level is lower than the equilibrium price level, then it must be TRUE that total planned
A) government spending is less than total planned tax revenues.
B) government spending exceeds total planned tax revenues.
C) real expenditures are less than total planned production.
D) real expenditures exceed total planned production.

Question

Quizplus · Accepted Answer

If the current price level is lower than the equilibrium price level, it means that the quantity supplied is greater than the quantity demanded. This implies that real expenditures (quantity purchased by consumers) exceed total planned production (quantity supplied by producers). Therefore, the correct option is D.

If the Current Price Level Is Lower Than the Equilibrium