In Which of the business cycle do firms try to cut stocks in order to save costs ?
Correct answer: D. The recession
- A. The upturn
- B. The peeking out
- C. The expansion
- D. The recession
Explanation
During a recession, firms face weak sales and try to reduce inventories or stocks to avoid storage and financing costs. Expansion and upturn phases generally involve rebuilding stocks to meet rising demand.
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About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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