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.

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