Adjustments Towards Equilibrium
When the economy is not at equilibrium, two things will change to bring us back to equilibrium: the inventory and the output.
If Output (Income) is Greater Than Aggregate Expenditure
When Y > AE the inventory will ________ and firms will respond by ________ output until Y = AE
If Output (Income) is Less Than Aggregate Expenditure
When Y < AE the inventory will ________ and firms will respond by ________ output until Y = AE
