Javier is a department manager at a big box store. Over the last month, sales have slumped, and he has lots of inventory going unsold. Now it's time to put in his orders to restock for next month.

a$.$ How, if at all, should Javier adjust his orders for new products?

$$ Javier should wait and see what happens next month, and if his inventory runs out, then he can place an order.

$$ Javier should place his orders according to his initial estimates.

$$ The inventory buildup is not an equilibrium. Javier should respond by cutting back on his orders.

b$.$ How will his suppliers respond to this decision?

$$ They will not be affected.

$$ They will cut back on production.

$$ They will expand their output.

$$ They will produce according to their initial demand estimates.

c$.$ Most other businesses are experiencing a similar decline in sales. Which of the following are is likely to occur as a result of the decline in sales?

Output will not be affected, and eventually, sales will rise to bring the economy back to equilibrium.

Aggregate expenditure will rise.

Output will fall in response to the decline, as businesses adjust their production.

Aggregate expenditure will fall.