When PAE < Y the economic response for inventories should be:
A. inventories will increase.
B. inventories will decrease.
C. there will be no change in inventories.
D. inventories should decrease initially and then sharply increase.
A. inventories will increase.
You might also like to view...
The Basel Accord requires banks to hold as capital an amount that is at least ________ of their risk-weighted assets
A) 10% B) 8% C) 5% D) 3%
Only about one out of three custodial mothers who are poor gets any child support payments
Indicate whether the statement is true or false
Refer to the above figure. Corn is an input for producing Corn Flakes. Which diagram shows the effect on the supply of Corn Flakes when the price of corn has increased?
A) graph C B) graph D C) neither graph D) both graphs
If the consumer price index (CPI) is 200 one year and 206 the next year, the annual rate of inflation as measured by the CPI is approximately _____
a. 103 percent b. 1 percent c. 6 percent d. 3 percent e. 206 percent