When unwanted business inventories pile up,which of the following is likely to occur?
A)A lower level of unemployment.
B)A higher level of output.
C)A lower price level.
D)No change in the level of output.

Question

Quizplus · Accepted Answer

When unwanted business inventories pile up, businesses may lower prices to reduce the excess inventory, leading to a lower price level in the economy. This does not necessarily lead to a change in the level of output, as output may have already been produced and is now sitting in inventory. There is also no clear relationship between unwanted inventories and unemployment levels.

When Unwanted Business Inventories Pile Up,which of the Following Is