If total spending rises from one year to the next, then which of the following could not be true?A. the economy is producing a larger output of goods and services, and goods and services are selling at lower prices. B. the economy is producing a smaller output of goods and services, and goods and services are selling at higher prices. C. the economy is producing a smaller output of goods and services, and goods and services are selling at lower prices. D. the economy is producing a larger output of goods and services, and goods and services are selling at higher prices.

An economy's level of spending reflects total spending on consumption, investment, government spending, ie, aggregate demand. The effect of increased spending experienced by an economy will have one of the following implications:

i) increase in production and change in selling price

ii) in an extreme case of an inflationary economy, the increase in spending does not affect real production, it is just a monetary effect of artificial price increases.

However, no increase in expenditure is compatible with decreasing production and selling price at the same time. This would be the case in a recessive scenario, incompatible with rising expenses.