Consider the two graphs above. Suppose that final goods are ...

[lracut11]

Consider the two graphs above. Suppose that final goods are assembled only when ordered and to satisfy the precise preferences of each consumer. This would ________ the desired level of inventories, as depicted in graph ________.
 
  A) increase; B
  B) increase; A
  C) decrease; B
  D) decrease; A

Question 2

Expectations are adaptive in ________.
 
  A) traditional Keynesian models
  B) the Lucas Model
  C) new Keynesian theory
  D) the real business cycle model

[cupcake16]

Answer to Question 1

B

Answer to Question 2

A

[lracut11]

Thanks for the timely response, appreciate it

[milbourne11]

Wow, this really help