In the Keynesian model, an unwanted decrease in inventories leads to
A) falling interest rates.
B) rising unemployment.
C) rising output.
D) falling money wages.

Question

Quizplus · Accepted Answer

In the Keynesian model, an unwanted decrease in inventories signals that actual sales are higher than expected, leading firms to increase production to replenish their inventories, thereby increasing output.

In the Keynesian Model, an Unwanted Decrease in Inventories Leads