Which of the Following About Inventory Changes and GDP Is

question 61

Multiple Choice

Which of the following about inventory changes and GDP is true?

• A) Inventory investment adds to GDP because it represents goods produced during the current period.
• B) Inventory investment is subtracted from GDP because the goods were not sold during the period.
• C) Inventory investment does not affect GDP because the goods were not sold during the period.
• D) Inventory investment does not affect GDP because it does not represent goods produced during the period.

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Definitions:

Insurable Risk

An eventuality for which both the frequency and magnitude of potential losses can be estimated with considerable accuracy. Insurance companies are willing to sell insurance against such risks.

Wages And Salaries

Compensation received by employees for their labor or services, typically paid on an hourly or annual basis.

Corporate Profits

The surplus income of a corporation after all expenses, including salaries and taxes, have been deducted.

Income Share

The proportion of total income earned by a specific group, often used in discussions of income inequality.