Suppose That Planned Spending for Consumer and Investment Goods Is

Multiple Choice

Suppose that planned spending for consumer and investment goods is greater than the level of total output produced by the economy, then:

A) the resulting shortage of goods and reductions in inventories will cause producers to increase their level of output and national income will rise.
B) an unplanned build-up in inventories with the result that national income rises.
C) a decline in national income because planned spending is less than actual spending.
D) either an increase or decrease in national income, it depends on the relative size of the marginal propensity to consume.
Respectively.