An article in the Wall Street Journal in early 2021 reported that “the economy contracted 3.5 percent last year, the largest decline since just after World War II.” The article also reported that the change in private inventories contributed to the contraction.

a. When the article notes that “the economy contracted,” which economic variable is it referring to? Briefly explain.

b. If the change in private inventories contributed to the economy contracting, did inventories increase or decrease? Briefly explain.