Suppose That in 2018,ABC Corporation Produced $6 Million Worth of Natural

question 105

Multiple Choice

Suppose that in 2018,ABC Corporation produced $6 million worth of natural gas pipes but was able to sell only $5 million worth.Is the remaining $1 million of unsold pipes part of GDP for 2018?

• A)Yes,since changes in inventories are part of consumption expenditures.
• B)Yes,since they are part of the economy's output in 2018.
• C)No,since changes in inventories are part of actual investment.
• D)No,since they are part of the economy's output only when sold.
• E)No,since they are added to existing inventories.

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Definitions:

Reallocation

The process of distributing or reallocating resources, tasks, or investments in a different manner with the aim to improve efficiency, returns, or outcomes.

Utility Increase

A rise in the level of satisfaction or benefit that a consumer derives from the consumption of goods or services.

Contract Curve

In economics, it represents the set of optimal distributions of goods or resources between parties that maximizes their utility in an exchange.

Relative Price

The price of a good or service in comparison to the price of other goods and services, reflecting its opportunity cost.