When Firms Reduce Their Target Level of Inventories, Equilibrium Expenditure

question 23

Multiple Choice

When firms reduce their target level of inventories, equilibrium expenditure _______ and real GDP _______.

• A)decreases; increases
• B)decreases; does not change
• C)increases; increases
• D)decreases; decreases
• E)increases; decreases

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Definitions:

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