Correct Response: A. The gross domestic product (GDP) is a measure of the value of all the goods and services produced within a country in a given time period. A decrease in consumption, with no other offsetting changes, will result in a decrease in the GDP, which will be accompanied by decreasing employment levels. If goods and services are not being purchased, then fewer workers will be needed to produce the goods and services. Inflation will increase when consumption increases (B). If consumption decreases, fewer goods are being purchased and inventory levels will most likely either remain the same or increase over time (C). When there is an increase in production, there will be an increase in GDP, followed by an increase in employment levels (D).
