If firms' unplanned inventories are increasing, then in a closed, private economy
A) the level of real national income will rise.
B) the level of real national income will not change in the foreseeable future.
C) actual consumption is greater than planned consumption.
D) consumers are saving more than businesses anticipated.

Question

Quizplus · Accepted Answer

When firms' unplanned inventories are increasing, it means that goods are not being sold as expected, indicating that consumers are spending less and saving more than businesses had anticipated. This does not directly imply a change in the level of real national income or that actual consumption is greater than planned.

If Firms' Unplanned Inventories Are Increasing, Then in a Closed