If Total Spending Is Greater Than the Value of Output

question 81

Multiple Choice

If total spending is greater than the value of output, firms will

• A)cut prices.
• B)decrease production levels.
• C)tend to raise prices.
• D)see inventories rise.

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Definitions:

General Welfare

A concept concerning the overall health, happiness, and well-being of a population or community.

Invisible Hand

A concept introduced by Adam Smith to describe the self-regulating nature of the market economy.

Economist

A professional who studies the production, distribution, and consumption of goods and services.

Economic Activity

Activities related to the creation, distribution, and use of goods and services in an economic system.