Refer to the information provided in Table 23.10 below to answer the question(s) that follow.
Table 23.10
-Refer to Table 23.10. If aggregate output equals ________, there will be a $100 million unplanned decrease in inventories.
A) $2,400 million
B) $2,800 million
C) $3,200 million
D) $3,600 million

Question

Refer to the information provided in Table 23.10 below to answer the question(s) that follow.
Table 23.10 
-Refer to Table 23.10. If aggregate output equals ________, there will be a $100 million unplanned decrease in inventories.
A) $2,400 million 
B) $2,800 million 
C) $3,200 million 
D) $3,600 million

Quizplus · Accepted Answer

The correct answer is A because when aggregate output equals $2,400 million, there will be a $100 million unplanned decrease in inventories. This is because at this level of output, firms are producing more than consumers are buying, so inventories are building up. To reduce inventories, firms will need to cut production, which will lead to a decrease in aggregate output.

Refer to the Information Provided in Table 23