Give the answer with valid reasons
Dear student,
Aggregate demand: It is an economic measurement of the total amount of demand for all finished goods amd services produced in an economy.Aggregate demand is expressed as the total amount of money exchanged for those goods and services at a specific price level and point in time.
In case of unintended inventory accumulation the economy would like to increase the aggregate demand.When there is unintended accumulations of inventories,the business has more inventory than it needs.The cash tied up in the accumulated inventories can be converted back only when the sales increase i.e. aggregate demand increases.
Therefore, When an economy is facing unintended inventory accumulation It will increase its aggregate demand.
Regards
Aggregate demand: It is an economic measurement of the total amount of demand for all finished goods amd services produced in an economy.Aggregate demand is expressed as the total amount of money exchanged for those goods and services at a specific price level and point in time.
In case of unintended inventory accumulation the economy would like to increase the aggregate demand.When there is unintended accumulations of inventories,the business has more inventory than it needs.The cash tied up in the accumulated inventories can be converted back only when the sales increase i.e. aggregate demand increases.
Therefore, When an economy is facing unintended inventory accumulation It will increase its aggregate demand.
Regards