All except one of the following statements concerning the equilibrium level of income are correct.Which is incorrect?
A)There will be no tendency for firms to increase or decrease production.
B)The economy is operating at full employment.
C)Unplanned investment in inventories will not occur.
D)Leakages equal injections.
E)Aggregate expenditures equal income.

Question

Quizplus · Accepted Answer

The statement "the economy is operating at full employment" is incorrect as it assumes that the equilibrium level of income implies full employment, which is not necessarily true. The equilibrium level of income can be below or above full employment, depending on various factors such as the level of government spending, taxes, and the foreign sector's contribution to the economy.

All Except One of the Following Statements Concerning the Equilibrium