If at some level of GDP the economy is experiencing an unintended decrease in inventories,
A) the aggregate level of saving will decline.
B) the price level will fall.
C) the business sector will lay off workers.
D) domestic output will increase.

Question

Quizplus · Accepted Answer

If the economy is experiencing an unintended decrease in inventories, it means that the demand for goods and services is greater than what was expected. This would lead firms to increase production to meet the unexpected demand, resulting in an increase in domestic output.

If at Some Level of GDP the Economy Is Experiencing