If aggregate expenditures equals $7,600 and aggregate income equals $8,000, businesses will produce:
A) more, raising both employment and income.
B) less, lowering both employment and income.
C) more, raising employment and lowering income.
D) less, lowering employment and raising income.

Question

Quizplus · Accepted Answer

When aggregate expenditures are less than aggregate income, businesses will produce less to avoid excess inventory, leading to lower employment and income.

If Aggregate Expenditures Equals $7,600 and Aggregate Income Equals $8,000