Consumer Goods That Are Produced,go into Inventory,and Are Not Sold

question 15

Multiple Choice

Consumer goods that are produced,go into inventory,and are not sold during the current period are

• A)counted as intermediate goods and so are not included in current period GDP.
• B)counted in current period GDP only if the firm that produced them sells them to another firm.
• C)included in current period GDP as inventory investment.
• D)included in current period GDP as consumption.

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Definitions:

Total Cost of Goods Sold

The sum of all costs directly involved in producing or purchasing products sold by a company during a given period.

High-low Method

A technique used to estimate fixed and variable components of costs by analyzing the highest and lowest levels of activity.

Utilities Cost

The expenses incurred for utilities consumed by a business, such as electricity, water, and gas.

Administrative Expense

Costs related to the general management and administration of a company, not directly tied to any specific department or product.