One of the early signs that an economy should increase its level of aggregate output is:
A) the willingness of firms to increase their level of investment in plant and equipment.
B) a reduction in the overall price level.
C) a surplus of consumer goods on the market.
D) an unplanned reduction in business inventories.

Question

Quizplus · Accepted Answer

An unplanned reduction in business inventories often indicates that consumer demand is higher than expected, suggesting that the economy could benefit from increasing its level of aggregate output to meet this demand.

One of the Early Signs That an Economy Should Increase