If Total Spending Is Less Than the Value of Total

question 173

Multiple Choice

If total spending is less than the value of total output, firms

• A)may decide to cut prices.
• B)may increase production levels.
• C)will tend to raise prices.
• D)will notice inventories falling.

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Definitions:

Fiat Currencies

Money that a government has declared to be legal tender, despite it not being backed by a physical commodity, with its value stemming from the trust and acceptance of the people.

Cryptocurrencies

Digital or virtual currencies using cryptography for secure financial transactions, operating independently of a central bank.

Physical Commodity

Tangible goods that are traded, bought, or sold, such as oil, grain, or metals.

Government Backing

The support or endorsement provided by a government to an entity, which can include financial guarantees, subsidies, or policies beneficial to the entity.