If inventories decline by more than analysts predict they will decline, this implies that
A)actual investment spending was greater than planned investment spending.
B)actual investment spending was less than planned investment spending.
C)actual investment spending was equal to than planned investment spending.
D)there is no relationship between actual investment spending and planned investment spending.
E)planned investment fell.

Question

Quizplus · Accepted Answer

When inventories decline more than expected, it indicates that actual sales were higher than anticipated, leading to less inventory than planned. This means actual investment spending (which includes inventory changes) was less than planned, as businesses did not invest as much in maintaining or increasing inventory levels.

If Inventories Decline by More Than Analysts Predict They Will