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.

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Definitions:

Base

A substance that accepts protons from acids according to the Brønsted-Lowry acid-base theory and has a high pH in solution.

Sugar

A sweet-tasting carbohydrate that is used as a source of energy in living organisms.

Protein

Large biomolecules consisting of one or more chains of amino acids, crucial for the structure, function, and regulation of the body's cells, tissues, and organs.

Amylase

An enzyme that catalyzes the breakdown of starches into sugars, playing a critical role in the digestive process.