Which of the Following Results from fiRms Holding Inventories

question 108

Multiple Choice

Which of the following results from firms holding inventories?

• A) The economy is much more susceptible to business cycle fluctuations.
• B) Demand shocks occur with greater frequency.
• C) Demand shocks occur less frequently.
• D) Firms can maintain production levels and adjust inventories in response to demand shocks.

---

Definitions:

Criminal Penalties

Punishments imposed by the court system for committing acts that violate criminal law, including fines, imprisonment, or probation.

Civil Penalties

Civil penalties are fines or other forms of punishment imposed by a governmental agency for violations of regulatory laws or ordinances, not involving criminal prosecution.

Government Regulation

The act of controlling, directing, or managing activities, industries, or entities by a governing body.

Business Law

A branch of law that deals with the rights, relations, and conduct of individuals and businesses engaged in commerce, merchandising, trade, and sales.