Figure 9-3

-In Figure 9-3, at $5,000 billion GDP, inventories will be

Question

Figure 9-3
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-In Figure 9-3, at $5,000 billion GDP, inventories will be

Quizplus · Accepted Answer

At $5,000 billion GDP, inventories will be accumulating, signaling businesses to cut production. This is because inventories accumulate when the output exceeds the demand. In other words, businesses are producing more than what is being bought by the consumers. Therefore, they need to cut production in order to match the demand and reduce the inventories.

Figure 9-3 ​

Figure 9-3