When total expenditures are greater than total production,__________ is produced than households want to buy,which leads to __________ in inventory,which signals firms that they have __________,which causes firms to increase production.
A) less; decreases; underproduced
B) more; increases; underproduced
C) less; increases; underproduced
D) more; decreases; overproduced

Question

Quizplus · Accepted Answer

When total expenditures exceed total production, it means that less is produced than households want to buy, leading to a decrease in inventory. This signals firms that they have underproduced, prompting them to increase production.

When Total Expenditures Are Greater Than Total Production,__________ Is Produced