When firms incur unplanned inventories, they typically
a. build new plants.
b. call for more government spending.
c. hire more workers and increase production.
d. lay off workers and reduce production.
Question 2
Inflation ________.
A) is more costly when it is anticipated than when it comes as a surprise
B) makes it more difficult to plan for the future, whether it is a surprise or not
C) induces distortions in the money and goods market but not the labor market
D) all of the above
E) none of the above
