Question

8) If the GDP of the economy is lower than the equilibrium GDP,
a) Inventories would fall below the desired level and thus firms increase their production.
b) Inventories would be above the desired level and thus firms increase their production.
c) Inventories would fall below the desired level and thus firms decrease their production.
d) Inventories would be above the desired level and thus firms decrease their production.

Answer 1

If the GDP of the economy is lower than the equilibrium GDP d) Inventories would be above the desired level and thus firms decrease their production.

What is Gross domestic product (GDP)?

Gross domestic product (GDP) serves as the monetary value that can be attributed to all finished goods and services in a country.

Therefore, once there is low , firms will decrease their production because inventory will be high.

made within a country during a specific period. GDP provides an economic snapshot of a country,

Learn more about Gross domestic product (GDP) at,:

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