Suppose That All Firms in the Economy Experience a Sudden

Multiple Choice

Suppose that all firms in the economy experience a sudden and unexpected increase of $125 billion in their inventories. We can say that:

A) firms will be reluctant to reduce their level of output, because they believe that consumption spending will eventually increase.
B) household spending was more than what the firms had initially estimated.
C) the level of planned inventories has remained constant.
D) firms over estimated aggregate expenditure by $125 billion.