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If ex-ante demand is less than ex ante supply. Then arrange the following in a chronological order.
A. Producer reacts by reducing output and employment
B. The process goes on till ex-ante demand becomes equal to ex ante supply
C. It will lead to unintended accumulation of inventories
D. When output reduces income also reduces
Choose the correct answer from the options given below:
A. Producer reacts by reducing output and employment
B. The process goes on till ex-ante demand becomes equal to ex ante supply
C. It will lead to unintended accumulation of inventories
D. When output reduces income also reduces
Choose the correct answer from the options given below:
- a)B, D, A, C
- b)C, A, D, B
- c)A, C, D, B
- d)C, B, A, D
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
If ex-ante demand is less than ex ante supply. Then arrange the follow...
The correct answer is B: C, A, D, B. Here's an explanation of the chronological order of events:
1. Unintended accumulation of inventories (C)
1. Unintended accumulation of inventories (C)
- When ex-ante demand is less than ex-ante supply, it means that producers are producing more goods than consumers are willing to buy at the given prices.
- As a result, there will be an unintended accumulation of inventories, as unsold goods pile up in warehouses and on store shelves.
2. Producer reacts by reducing output and employment (A)
- To alleviate the problem of excess inventories, producers will respond by cutting back on production.
- This may involve reducing the number of workers employed, scaling back the use of raw materials, or lowering production targets.
3. When output reduces, income also reduces (D)
- As producers reduce output, the overall income in the economy will also decrease.
- This is because workers may have their hours cut or lose their jobs entirely, resulting in lower wages and a reduction in overall spending.
4. The process goes on until ex-ante demand becomes equal to ex-ante supply (B)
- This process of reducing output and employment will continue until the excess inventories are cleared and ex-ante demand equals ex-ante supply.
- At this point, the economy will have reached a new equilibrium, with the level of production matching the level of demand.
In summary, when ex-ante demand is less than ex-ante supply, the sequence of events unfolds as follows: unintended accumulation of inventories (C), producers reducing output and employment (A), reduced income (D), and the process continuing until ex-ante demand equals ex-ante supply (B).
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If ex-ante demand is less than ex ante supply. Then arrange the following in a chronological order.A. Producer reacts by reducing output and employmentB. The process goes on till ex-ante demand becomes equal to ex ante supplyC. It will lead to unintended accumulation of inventoriesD. When output reduces income also reducesChoose the correct answer from the options given below:a)B, D, A, C b)C, A, D, Bc)A, C, D, B d)C, B, A, DCorrect answer is option 'B'. Can you explain this answer?
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