Homework Answers
Business inventories tend to decrease and signals firms to increase production if total expenditure (TE) is higher than total product (TP).
Business inventories tend to rise and signals firms to decrease production if total expenditure (TE) is smaller than total product (TP)
The economy is in equilibrium if total expenditure (TE) = total product (TP)
(1) The economy is in equilibrium (TE=TP)
(2) unexpected business inventory depletion signals firms to increase production (TE>TP)
(3) unexpected business inventory accumulation signals firms to decrease production (TE<TP)
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please answer asap. i will rate
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