Question

The economy is in equilibrium, TP = TE. Then, net exports fall. As a result, the __________ curve shifts __________, inventory levels unexpectedly __________, and business firms __________ the quantity of good and services they produce.

Answer 1

Answer:

1. The Total Expenditure curve shifts Upward

2. Falls

3. Increase

Explanation:

Economic equilibrium is a state where economic forces are balanced. Total Expenditure curve shifts upward.

There will be a fall in inventories level

Supply and demand for goods are equal which is equilibrium in the market. Business firms will increase the quantity of goods and services they produce.