Consider the Simplest Macro Model with a Constant Price Level

question 51

Multiple Choice

Consider the simplest macro model with a constant price level and demand-determined output.If desired aggregate expenditure is less than actual national income,then

• A)inventories begin to fall,causing firms to increase production.
• B)actual national income is below the equilibrium level.
• C)actual national income must be above the equilibrium level.
• D)actual national income must be at equilibrium.
• E)inventories begin to fall,causing national income to fall.

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