The Local Subaru Dealership Has an Increase in Inventory of 17

question 30

Multiple Choice

The local Subaru dealership has an increase in inventory of 17 cars in 2012. In 2013 it sells all 17 cars.

• A) The value of the increased inventory will be counted as part of the investment component of GDP in 2012, and the value of the 17 cars sold in 2013 will reduce the investment component in 2013 GDP.
• B) The value of the 17 unsold cars will be deducted from the investment component of GDP in 2012, and the value of the 17 cars sold in 2013 will increase the consumption component in 2013 GDP.
• C) The value of the increased inventory will be counted as part of GDP in 2012 and the value of the 17 cars sold in 2013 will cause 2012 GDP to increase.
• D) The value of the increased inventory will not affect 2012 GDP, but the sale of the cars in 2013 will cause 2013 GDP to increase.

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Definitions:

Standard Deduction

A fixed dollar amount that reduces the income on which you are taxed, an alternative to itemizing deductions, varies based on filing status.

Tax Year

The 12-month period for which tax is calculated and paid. It can be a calendar year or a fiscal year.

Filing Joint Return

The tax filing status used by married couples who choose to combine their income and report it on one tax return.

Qualifying Widow(er)

A tax filing status available to a widowed individual with dependents, providing eligibility for standard deduction and tax rates that are more favorable for a specific period following the spouse's death.