If aggregate demand is lower than total output in an economy national income will

Ayoolakay

5 years ago

The answer suppose to be fall, because while the aggregate demand decreases, the total output will increase and it will lead to excess supply which will make the price of the goods to fall in order to encourage consumption

kinsmart

2 months ago

The correct answer is: D. fall

This is because when aggregate demand is insufficient to absorb total output, firms cut back production, leading to a decline in national income through the multiplier process until a new equilibrium is reached at a lower income level.