Refer to the information provided in Figure 8.10 below to answer the questions that follow. Figure 8.10
-Refer to Figure 8.10. At aggregate output levels below $1,000 million, there are
A) unplanned decreases in inventories and output increases.
B) unplanned increases in inventories and output increases.
C) unplanned increases in inventories and output decreases.
D) unplanned decreases in inventories and output decreases.

Question

Refer to the information provided in Figure 8.10 below to answer the questions that follow.  Figure 8.10
-Refer to Figure 8.10. At aggregate output levels below $1,000 million, there are
A) unplanned decreases in inventories and output increases. 
B) unplanned increases in inventories and output increases. 
C) unplanned increases in inventories and output decreases. 
D) unplanned decreases in inventories and output decreases.

Quizplus · Accepted Answer

At aggregate output levels below $1,000 million, firms are producing less than what consumers are willing to buy, leading to unplanned decreases in inventories as firms sell more than they anticipated. This situation typically prompts firms to increase output to replenish their inventories.

Refer to the Information Provided in Figure 8