When the Strong Positive Correlation Between Inventories and GDP Is

question 46

Multiple Choice

When the strong positive correlation between inventories and GDP is violated, it is usually because

• A) forward-looking businesses missed a turn in aggregate demand and buffer stocks either climb as GDP falls or fall as GDP climbs.
• B) forward-looking businesses missed a turn in aggregate demand and their pipeline holdings of material inputs are bid up as GDP falls or bid down as GDP rises.
• C) investment projects undertaken by businesses cost more than expected during inflationary upturns.
• D) investment projects lose significant amounts of money when they are undertaken during deflationary recessions.
• E) none of the above.

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Definitions:

Incubation Step

A phase in the creative process or problem-solving where ideas are subconsciously pondered, leading to innovative solutions.

Graham Wallas

An academic who developed a conceptual framework for understanding how creativity functions, emphasizing the necessity of a period of unconscious processing in creative thought.

Illumination

The moment in the creative process when a person arrives at an insight or solution after a period of reflection.

Creative Process

A sequence of thought and action steps involved in the generation of new ideas, solutions, or artistic expressions.