In this graph, if firms are producing at level Y2, then inventories will _____, inducing firms to _____ production. a. rise; not change b. rise; increase c. remain unchanged; decrease d. remain unchanged; not change

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
ChapterB: Indifference Curves
Section: Chapter Questions
Problem 1RQ: Exercise B1 What point is preferred along an indifference Curve?
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In this graph, if firms are producing at level Y2, then inventories will _____, inducing firms to _____ production.
a. rise; not change
b. rise; increase
c. remain unchanged; decrease
d. remain unchanged; not change 
Planned
expenditure, PE
PE4
PE
PE₂
PE₁
Y₁
Y₂
Y3
Actual expenditure
Planned expenditure
Income, output Y
Transcribed Image Text:Planned expenditure, PE PE4 PE PE₂ PE₁ Y₁ Y₂ Y3 Actual expenditure Planned expenditure Income, output Y
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