As the economy turns the corner into a recession, the level of unplanned inventories ________ and firms ________ production.
A) increases; begin to increase
B) decreases; begin to decrease
C) increases; begin to decrease
D) increases; do not change
E) decreases; begin to increase

Question

Quizplus · Accepted Answer

During a recession, demand for goods typically decreases, leading to an increase in unplanned inventories as products remain unsold. Consequently, firms begin to decrease production in response to the accumulation of these inventories and reduced demand.

As the Economy Turns the Corner into a Recession, the Level