(Figure: Aggregate Expenditures) the Figure Shows the Aggregate Expenditures Line

Multiple Choice

(Figure: Aggregate Expenditures) The figure shows the aggregate expenditures line for an economy. Which is the proper sequence of events if income was originally at $100?

A) Total spending exceeds income, firms reduce production, workers are laid off, and incomes fall until equilibrium is reached.
B) Total income exceeds spending, firms expand production, workers are hired, and incomes rise until equilibrium is reached.
C) Total spending exceeds income, firms expand production, workers are hired, and incomes rise until equilibrium is reached.
D) Total income exceeds spending, firms reduce production, workers are laid off, and incomes fall until equilibrium is reached.