Aggregate output will increase if there is a(n)
A) increase in saving.
B) unplanned rise in inventories.
C) unplanned fall in inventories.
D) decrease in consumption.

Question

Quizplus · Accepted Answer

An unplanned fall in inventories means that goods have been sold more quickly than expected, implying that more goods need to be produced to meet the demand. This will lead to an increase in aggregate output. The other options do not necessarily lead to an increase in aggregate output.

Aggregate Output Will Increase If There Is A(n)