The End of an Expansion When Output, Income, and Employment

question 70

Multiple Choice

The end of an expansion when output, income, and employment begin to decline is referred to as

• A)a depression.
• B)an inflationary period.
• C)a peak.
• D)a trough.

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Definitions:

Inventories

Stocks of goods and materials that a company holds for the purpose of resale or production.

Inventory

The total quantity of goods and materials held in stock by a business, warehouse, or retail location.

Overstocking

The practice of holding more inventory than is necessary, often leading to excess stock that is difficult to sell.

Understocking

The condition where the inventory levels are too low, risking stockouts, lost sales, and dissatisfied customers.