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When the news of Wednesday's numbers on GDP was made public, stocks and bonds immediately rose and the U.S. dollar strengthened. Then, when analysis of the numbers came in, the markets went into reverse. The reason was that the greater part of 16 the improvement in the quarter - $33.7 billion out of a total GDP advance of $39.2 billion - came from additions to business inventories."
Markets went into reverse upon learning about the additions to inventories because it suggested that
a) output had risen, raising inflation fears
b) output had fallen, raising unemployment fears
c) aggregate demand had risen, raising inflation fears
d) aggregate demand had fallen, raising unemployment fears
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