Economics · Macroeconomics
When there is a market glut in an economy:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Aggregate spending automatically rises to restore equilibrium
- 2The price level rapidly rises to clear all excess supply
- 3Demand exceeds supply, leading to price increases and a rise in income
- 4Supply exceeds demand, leading to excess inventories and a fall in output/income✓
Correct answer
Supply exceeds demand, leading to excess inventories and a fall in output/income
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