1. Although a small part of the overall economy, changes in inventories can influence economic growth measures...
Question:
1. Although a small part of the overall economy, changes in inventories can influence economic growth measures significantly because they:
A. reflect general business sentiment.
B. tend to move forcefully up or down.
C. determine the availability of goods for sale.
2. Inventories tend to rise when:
A. inventory–sales ratios are low.
B. inventory–sales ratios are high.
C. economic activity begins to rebound.
3. Inventories will often fall early in a recovery because:
A. businesses need profit.
B. sales outstrip production.
C. businesses ramp up production because of increased economic activity.
4. In a recession, companies are most likely to adjust their stock of physical capital by:
A. selling it at fire sale prices.
B. not maintaining equipment.
C. quickly canceling orders for new construction equipment.
5. The inventory–sales ratio is most likely to be rising:
A. as a contraction unfolds.
B. partially into a recovery.
C. near the top of an economic cycle.
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