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.

---

Definitions:

Tatami Mats

Traditional Japanese straw mats used for flooring, known for their specific size and texture, contributing to the aesthetic and functionality of Japanese architecture.

Tariffs

Taxes imposed on imported goods and services aimed at increasing their price to reduce importation and protect domestic industries.

Domestic Farm Lobby

The domestic farm lobby is an advocacy group focusing on promoting the interests of farmers and agricultural producers within a country, often influencing government policies.

Government Taxes

Compulsory financial charges imposed by governments on individuals, corporations, and transactions to fund public expenses.