If an Unintended Increase in Business Inventories Occurs

question 115

Multiple Choice

If an unintended increase in business inventories occurs,

• A) we can expect aggregate production to be unaffected.
• B) we can expect businesses to increase the level of production.
• C) we can expect businesses to lower the level of production.
• D) aggregate expenditures must exceed the domestic output.

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Definitions:

Availability Heuristic

A cognitive heuristic that depends on readily accessible examples in an individual's memory when assessing a particular subject, idea, technique, or choice.

Mood-Congruent Memory

The tendency to recall memories that are congruent with one's current mood, enhancing the mood's effects on memory recall.

Fundamental Attribution Error

The tendency to overemphasize personal characteristics and ignore situational factors when explaining others' behaviors.

Dispositional Attribution

The process of attributing behavior to the internal characteristics or disposition of the individual rather than to external factors.