Macroeconomics 11th Edition by Michael Parkin

Exercise 24

Real GDP with a Fixed Price Level
Wholesale Inventories Decline, Sales Rise
The Commerce Department reported that wholesale inventories fell 1.3 percent in August for a record 12th consecutive month, evidence that companies are trimming orders to factories, which helped depress economic output during the recession. Economists hope that the rising sales will encourage businesses to begin restocking their inventories, which would boost factory production and help bolster broad economic growth in coming months.
Explain why a fall in inventories is associated with recession and a restocking of inventories might bolster economic growth.