Apple Has Started Producing the Newest IPhone, but Doesn't Plan

question 3

Multiple Choice

Apple has started producing the newest iPhone, but doesn't plan to sell the phones it makes this year until the official product launch next year. How will these iPhones affect this year's GDP?

• A) They are inventory and will decrease GDP
• B) They will increase GDP
• C) GDP will increase next year, when the phones are sold
• D) GDP will increase by less than the full cost of the phone due to depreciation

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Definitions:

Assets

Resources owned by an individual, company, or country, valued for their ability to generate revenue, reduce expenses, or provide value in the future.

Net Worth

The total value of an individual's or entity's assets minus liabilities; a measure of financial health.

Liabilities

Financial obligations or debts owed by a company or an individual.

M1

A category of the money supply that includes all physical money, such as coins and currency, as well as demand deposits and other liquid assets held by the central bank.