12
Question
When aggregate demand exceeds aggregate supply or when investment is greater than savings, _____________ will increase.
When aggregate demand exceeds aggregate supply or when investment is greater than savings, _____________ will increase.
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Solution
The correct option is B income
When aggregate demand is more than aggregate supply or when investment is more than saving in the economy , then the planned inventory
would fall below the desired level. To bring back the Inventory at the desired
level, the producers will expand the output. Therefore, as a result of more output in the economy, the income will increase.
When aggregate demand is more than aggregate supply or when investment is more than saving in the economy , then the planned inventory would fall below the desired level. To bring back the Inventory at the desired level, the producers will expand the output. Therefore, as a result of more output in the economy, the income will increase.
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