Suppose that inventories are rising. We could expect that, in the future:
A) Real GDP will likely increase
B) Real GDP will likely decrease
C) We can't predict what will happen to real GDP
D) Firms will raise prices of their goods and services

Question

Quizplus · Accepted Answer

Rising inventories indicate that businesses are producing more goods than they are selling. This oversupply can lead to a decrease in demand, which can lead to a decrease in Real GDP.

Suppose That Inventories Are Rising