In a booming economy, ________ and so inventories ________.
A) production is rising; rise
B) consumption is rising; fall
C) government expenditures shrink; rise
D) inflation rises; fall
E) personal savings rise; rise

Question

Quizplus · Accepted Answer

In a booming economy, production is rising to meet the increased demand, which means that inventories also rise to keep up with production levels. Option B is incorrect because if consumption is rising, inventories would actually need to rise as well to meet the higher demand. Option C is incorrect because in a booming economy, government expenditures may increase due to higher tax revenue, but this would not have a direct impact on inventories. Option D is incorrect because while inflation may rise in a booming economy, it does not necessarily have a direct impact on inventories. Option E is incorrect because while personal savings may rise in a booming economy, this also does not have a direct impact on inventories.

In a Booming Economy, ________ and So Inventories ________

In a Booming Economy, and So Inventories