Inventory depletion is a warning sign of
A)Inflation.
B)Deflation.
C)A drop in AS.
D)A drop in AD.To replenish inventories,firms will increase production and hire more,putting upward pressure on costs that later shows up as a higher price level,or inflation.

Question

Quizplus · Accepted Answer

Inventory depletion is a warning sign of inflation because when inventories are depleted, firms will increase production and hire more, putting upward pressure on costs that later shows up as a higher price level, or inflation.

Inventory Depletion Is a Warning Sign of