XB HW3-ECON 2000-03 PrinciHW 3 newconnect.mheducation.com/flow/connect.htm PCC H
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XB HW3-ECON 2000-03 PrinciHW 3 newconnect.mheducation.com/flow/connect.htm PCC Home youtube N Netflix amazon mctc Help S Saved a. Changes in inventories are included as part of investment spending because anything produced by a business that has been sold during the accounting period is something in which the business he consumed O anything produced by a business that has not been sold during the accounting period is something in which the business consumed O anything produced by a business that has been sold during the accounting period is something in which the business has invested O anything produced by a business that has not been sold during the accounting period is something in which the business has invested b. f inventories declined by $1 billion during 2014, then $1 billion would be subtracted from both gross private domestic investment and gross domestic product. added to gross private domestic investment and subtracted from gross domestic product added to both gross private domestic investment and gross domestic product subtracted from gross private domestic investment and added to gross domestic product.Explanation / Answer
Answer a. Changes in the inventories are included as part of investment spending because anything produced by a business that has not been sold during the accounting period is something in which the business has consumed.
Change in inventory is a flow concept which as part of investment spending is included in the GDP calculation.
b. If inventories decline by $1billion, then $ 1billion will be subtracted from gross private domestic investment and added to gross domestic product.
The decline in inventory along with other sales will make the total goods produced in the country.
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