Inventories are part of an investment and therefore included in GDP because
A. inventories represent the amount of factors of production firms have used to produce goods.
B. the sale of shares of stock are not included in any other component, inventories allow GDP to capture this spending.
C. the value added by production goes into goods but not production and since goods start in inventory, that component needs to be computed.
D. firms produce goods, however, sometimes the goods may be unsold at the time GDP is computed.
Inventories are part of an investment and therefore included in GDP because
A. inventories represent the amount of factors of production firms have used to produce goods.
B. the sale of shares of stock are not included in any other component, inventories allow GDP to capture this spending.
C. the value added by production goes into goods but not production and since goods start in inventory, that component needs to be computed.
D. firms produce goods, however, sometimes the goods may be unsold at the time GDP is computed.
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Related questions
1. The multiplier helps explain
A. why a decrease in taxes causes real Gross Domestic Product (GDP) to fall by more than the amount of the decrease in taxes. |
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B. why a fall in investment cause real Gross Domestic Product (GDP) to rise by more than the amount of the decrease in investment. |
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C. why a rise in government expenditures causes real Gross Domestic Product (GDP) to rise by more than the amount of the increase in government spending. |
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D. why an increase in disposable income causes real Gross Domestic Product (GDP) to rise by less than the amount of the increase in disposable income.
2. If the marginal propensity to save (MPS) increases, the multiplier
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