When Estimating GDP, Changes in the Level of Inventory Are

question 102

Multiple Choice

When estimating GDP, changes in the level of inventory are calculated because:

• A)it indicates the level of employment in the economy.
• B)it provides information about a firm's expectations.
• C)it is a good indicator of the competitiveness of the economy.
• D)it shows the level of business spending by firms.
• E)it determines the value of goods produced in a year but not sold in that year.

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Definitions:

Quality Cost Report

A document detailing the expenses incurred from preventing defects, appraising the quality of products, and any costs arising from products failing to meet quality standards.

Prevention Costs

Expenses incurred to avoid defects and improve quality in the production process, part of the broader category of quality costs.

Appraisal Costs

Costs associated with ensuring product or service quality, including costs for inspections, testing, and other quality assurance activities.

Throughput Time

The amount of time required for a product to pass through a manufacturing process from start to finish.