If a recession is unexpected, business inventories typically will:
A) keep rising.
B) keep falling.
C) fall and then rise.
D) rise and then fall.

Question

Quizplus · Accepted Answer

During an unexpected recession, businesses often find themselves with excess inventory due to a sudden drop in demand, causing inventories to rise initially. As businesses adjust to the lower demand, they reduce production, leading to a subsequent fall in inventories.

If a Recession Is Unexpected, Business Inventories Typically Will