You observe that unplanned inventories are increasing. You predict that there will be .
A) a business cycle
B) a trough
C) a recession
D) an expansion

Question

Quizplus · Accepted Answer

Unplanned inventories usually increase when demand for goods and services decreases. This indicates that businesses are producing more than what is demanded by consumers. As a result, businesses may cut back on production and employment, leading to a decline in economic activity and a recession.

You Observe That Unplanned Inventories Are Increasing