If the Economy Is Operating Below (To the Left Of)

Multiple Choice

If the economy is operating below (to the left of) the IS curve, then real GDP is _______ than planned expenditure,

A) greater; inventories are decreasing faster than expected, and businesses will reduce production.
B) less; inventories are decreasing faster than expected, and businesses will increase production.
C) greater; inventories are increasing faster than expected, and businesses will reduce production.
D) less; inventories are increasing faster than expected, and businesses will increase production.