00:01
Okay, so state whether the following statement is true or false, give valid reasons.
00:14
So it's an economy facing unintended accumulation of inventories would try to reduce aggregate demand.
00:50
Okay, so to understand the statement, the statement in question is whether the economy facing unattended, accumulation of inventories would try to reduce aggregate demand.
01:01
To analyze this, we first need to understand what the unintended accumulation of inventory means and how it relates to aggregate demand.
01:09
So unintended accumulation of inventories occurs when a business has more stock on hand than it planned or desired.
01:39
This usually happens because the actual demand for the product was less than what the business anticipated.
01:46
In other words, the goods produced by the economy are not being sold at the expected rate.
01:52
So aggregate demand is the total demand for all goods and services in an economy at a given overall price level and in a given period of time...