Related to the Economics in Practice on p. 153: If a recovery from a recession is slower than expected, companies like General Motors would likely experience ________ in unplanned inventories and as a result ________ production.
A) increases; increase
B) decreases; decrease
C) increases; decrease
D) decrease; increase

Question

Quizplus · Accepted Answer

If a recovery from a recession is slower than expected, demand for goods may not increase as quickly as anticipated. This would result in an increase in unplanned inventories as companies produce more goods than they are selling. As a result, to avoid further build-up of inventories, companies like General Motors would likely decrease production. Therefore, the correct answer is (C) increases in unplanned inventories and as a result decrease in production.

Related to the Economics in Practice on P