There Is an Increase in Aggregate Demand, and Firms Do

question 42

Multiple Choice

There is an increase in aggregate demand, and firms do not have sufficient capital and labor to support an output increase. In this case, inventory stocks will

• A) continue to fall, and there will be a large increase in the price level.
• B) continue to increase, and there will be a large increase in the price level.
• C) continue to fall, and the price level will fall.
• D) remain unchanged, and the price level will remain unchanged.

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