When Firms Experience Unplanned Inventory Accumulation, They Typically

question 96

Multiple Choice

When firms experience unplanned inventory accumulation, they typically:

• A) build new plants.
• B) lay off workers and reduce production.
• C) hire more workers and increase production.
• D) call for more government spending.

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Definitions:

Business Cycle

The cyclic phenomenon of economic expansion and contraction experienced by an economy over time.

Trough

A Trough in economics is a phase in the business cycle where activity is at its lowest point, preceding a recovery and expansion phase.

Business Cycle

The Business Cycle is the fluctuation of economic activity that an economy experiences over a period of time, marked by phases of expansion and contraction.

Recovery Phase

A stage in the economic cycle where activity starts to increase again after a downturn, leading to improvements in employment, consumer confidence, and spending.