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

Question

Quizplus · Accepted Answer

When total production exceeds total expenditures, it means that more goods are produced than households want to buy. This leads to an increase in inventory, indicating to firms that they have overproduced, which in turn causes them to reduce their production levels.

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