When aggregate supply exceeds aggregate demand ?
Correct answer: A. Business inventory accumulate
- A. Business inventory accumulate
- B. Unemployment exists
- C. Price of consumer goods rise
- D. People save more than they intended to save
Explanation
When aggregate supply exceeds aggregate demand, firms cannot sell all current output, so unintended inventories accumulate. This may later cause reduced production and unemployment, but inventory accumulation is the immediate identity-based result.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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