Understanding Inventory Behavior. Use the simple income-expenditure model to analyze the following scenarios. a. Suppose clothing stores anticipate a good fashion season and add substantially to...

Understanding Inventory Behavior. Use the simple income-expenditure model to analyze the following scenarios.

a. Suppose clothing stores anticipate a good fashion season and add substantially to inventories in their stores. What will happen to GDP?

b. Suppose economists see inventories suddenly increasing. Does this necessarily mean that there are increases in demand for final goods and services?