When firms reduce their target level of inventories, equilibrium expenditure and

Question

When firms reduce their target level of inventories, equilibrium expenditure and real GDP . When firms plan to restock their inventories. equilibrium expenditure and real GDP . The Commerce Department reported that wholesale inventories fell 1.3 percent in August for a record 12th consecutive month, evidence that Companies are trimming orders to factories, which helped depress economic output during the recession Economists hope that the rising sales will encourage businesses to begin restocking their inventories, which would boost factory production and help bolster broad economic growth in coming months.

Explanation / Answer

1. D. Increase, Increase

2. D. Decrease,. decrease.

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