If business inventories decrease below desired levels,then it is likely that a
A)Higher level of unemployment will result.
B)Lower level of output will occur.
C)Higher price level will occur.
D)Recessionary gap will occur.

Question

Quizplus · Accepted Answer

When business inventories decrease below desired levels, it often indicates that demand is higher than expected, which can lead to upward pressure on prices as businesses may raise prices to balance demand and supply, resulting in a higher price level.

If Business Inventories Decrease Below Desired Levels,then It Is Likely