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Suppose the island of Catsylvania experiences a recession. As a result, consumers reduce spending on Kitty Chow and planned aggregate expenditures fall short of realGDP.

Suppose the island of Catsylvania experiences a recession. As a result, consumers reduce spending on Kitty Chow and planned aggregate expenditures fall short of realGDP.

As a result, unplanned inventories at Kitty Chow firmswill

decrease.

increase.

remain unchanged.

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