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03-01-2022
Social Studies

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What happens in the economy if total production (TP) is greater than total expenditures (TE)?

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03-01-2022

Answer:

When the total production exceeds the total expenditure, it suggests overproduction in the economy, which causes the inventories of producers to rise. As a result, the firms reduce their production, which, in turn, reduces the real GDP.

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