Country A specializes in the production of automobiles,and 45 percent of its population works in the automobile manufacturing industry.A sharp increase in the world prices of automobiles led to a boom in the automobile manufacturing industry in Country A.However,the automobile manufacturers overestimated the demand for automobiles.This led to overproduction,which resulted in a large stock of unsold cars.Which of the following is likely to happen in the near future?
A) The unemployment rate in Country A will increase.
B) Household consumption in Country A will increase.
C) Investment in Country A will increase.
D) The supply of credit in Country A will increase.

Question

Quizplus · Accepted Answer

Overproduction of automobiles will lead to a surplus of inventory, thus reducing the demand for further automobile manufacturing. This could lead to a decrease in automobile manufacturing jobs and an increase in the unemployment rate in Country A. The other options are not likely to happen in the near future given the given scenario.

Country a Specializes in the Production of Automobiles,and 45 Percent