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What Are Inventories? What Usually Happens to Inventories at the Beginning

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Essay

What are inventories? What usually happens to inventories at the beginning of a recession,and what usually happens to inventories at the beginning of an expansion?


Definitions:

Base Year

A specific year against which economic growth or other variables are measured and compared.

Current Year

The present calendar year in which a transaction or event occurs or is being discussed.

Laspeyres Price Index

An economic measure that calculates the change in the price of a basket of goods and services, using the quantities purchased in the base year as weights.

Per Capita Income

The average income earned per person in a given area or country.

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