As an indicator of an impending recession, inventories will most likely:. A. decrease as a result of a decrease in consumption
B. decrease as a result of an increase in aggregate supply
C. increase as a result of a decrease in aggregate supply
D. increase as a result of a decrease in consumption
E. remain constant as a result of economic uncertainty

D. increase as a result of a decrease in consumption

Explanation:

Economics can be classified into two (2) categories, namely;

I. Macroeconomics can be defined as the study of behaviors, performance and factors that affect the entire economy. Hence, it focuses on aggregate phenomena such as price level, economic growth, Gross Domestic Product (GDP), inflation, recession, unemployment and national income levels with respect to the central bank, demand or supply shocks, government policies, aggregate spending and savings.

2. Microeconomics can be defined as the study of the effect of price and quantity levels through interactions between individual buyers and sellers in various markets. It is focused on analyzing or evaluating the decisions of consumers (buyers) and those of firms (sellers) such as methods of production, pricing; and the manner in which government policies affect those decisions.

Hence, as an indicator of an impending recession, inventories will most likely increase as a result of a decrease in consumption and general decline or fall in economic activities in the society.