Figure 23-1 -Refer to Figure 23-1. If the Economy Is at Point

Multiple Choice

Figure 23-1
-Refer to Figure 23-1. 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.