What do we call it when businesses and consumers buy more goods than they produce?

When businesses and consumers buy more goods than they produce, this situation is referred to as a deficit. In an economic context, a deficit occurs when the total demand in an economy exceeds its total supply, indicating that the consumption of goods and services is higher than what is being produced domestically. This often leads to increased imports as businesses and consumers seek to satisfy their demand through external sources.

A deficit can have various implications, such as influencing trade balances and impacting domestic industries. If the deficit persists, it may lead to issues such as rising debt levels or the need for adjustments in economic policy to address the imbalance between production and consumption.

In contrast, the other options represent different concepts. A surplus refers to a scenario where the production of goods exceeds consumer demand, resulting in excess inventory. Investment pertains to the allocation of resources, typically in the form of capital, to generate future benefits but does not directly address the relationship between consumption and production levels. Expenditure refers to the act of spending money but does not inherently indicate the relationship between what is produced versus what is consumed.