Question

If an economy's GDP falls, then it must be the case that the economy's a. income and saving both fall. b. income falls and expenditure rises. c. income and expenditure both fall. d. income falls and saving rises.

Answer 1

When the income and expenditure both fall, then, it is likely that the economy's GDP will falls.

Basically, the economy's GDP refers to the total of all value added created in an economy in a particular period,

• So, when income and expenditure of an economy falls, then, it is likely that the economy's GDP will falls consequently.

Therefore, the Option B is correct because it is likely that the economy's GDP will falls.

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