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.

---

Definitions:

Probability

A quantification of the probability of an event happening, indicated by a value ranging from 0 to 1, with 0 meaning the event cannot happen and 1 meaning the event is certain to happen.

Standard Deviation

A statistic that measures the dispersion or variability of a dataset relative to its mean, indicating how spread out the values are.

Simple Random Sample

An evenly selected portion of a wider population, with each participant having an equal opportunity to be chosen.

Sample Size

The number of observations or data points collected in a statistical study, which impacts the study's accuracy and conclusions.