According to the Keynesian View, If Purchasers Buy More Goods

question 47

Multiple Choice

According to the Keynesian view, if purchasers buy more goods and services than businesses expect,

• A) the inventories of firms would decline, and the firms would expand output in order to restore their inventories to desired levels.
• B) the inventories of firms would increase, and the firms would reduce output until inventories were cut back to the desired level.
• C) the current level of income would persist in the future.
• D) firms would reduce their investment, and the economy would fall into a recession.

---

Definitions:

Noncash Investing

Activities related to the acquisition and disposal of long-term assets and other investments not involving immediate cash transactions.