Explain why each of these indicators would show that the economy would...

R

river

Member
...grow in the near future.? If business inventories are falling, the average hours worked per week is going up, and there is an increase in the number of new building permits, we would expect the economy to be in an expansion phase of the business cycle. Explain why each of theses indicators would show that the economy would grow in the near future.
 
A

axesenzon

New member
if new inventories are falling, then businesses are at capacity and thereby will make new efforts to become more competitive and get rid of their surplus inventory. Hours of labour/week going up suggests an efficient use of labor, and as well suggests high employment. New building permits suggest an increase in the demand for commercial space, thereby also suspecting an increase in production greater than what is currently sustained. All these suggest an expansion to the economy they are taking place in.
 
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