Refer to Figure 9.1 for the Following Questions

Multiple Choice

Refer to Figure 9.1 for the following questions.
Figure 9.1

-In Figure 9.1, if the economy is at point L, what will happen?

A) Inventories have fallen below their desired level and firms decrease production.
B) Inventories have fallen below their desired level and firms increase production.
C) Inventories have risen above their desired level and firms decrease production.
D) Inventories have risen above their desired level and firms increase production.