Final answer:
Varying the quantity of output to match consumers' demand at preset prices is called 'meeting demand'. It's a key aspect of macroeconomic theories which addresses how firms respond to changes in market demand within the constraints of their production capabilities.Option D is the correct answer.
Step-by-step explanation:
Varying the quantity of output produced and sold at preset prices is referred to as meeting demand. This concept is integral to the macroeconomic theories regarding the dynamics between supply and demand. In the context of Keynesian economics, which often applies in the short term, demand can increase to a point where firms struggle to produce enough, embodying the principle that 'Demand creates its own supply'.
However, in the long term, as indicated by Say's Law, the economy's capacity to supply goods grows alongside the increase in total demand, assuming that supply creates its own demand. It's crucial to understand that while demand may steer short-term production levels, actual output is ultimately constrained by factors such as the available labor, capital, technology, and the institutional framework governing production.