FIGURE 21-3 Refer to Figure 21-3

Multiple Choice

FIGURE 21-3 Refer to Figure 21-3.If national income is Y₁ and the aggregate expenditure function is AE₁,

A) the economy is in equilibrium.
B) there is unintended inventory accumulation and income will rise.
C) there is unintended inventory accumulation and income will fall.
D) there is unintended inventory decumulation and income will rise.
E) there is unintended inventory decumulation and income will fall.