Consumption Is $6 Million, Planned Investment Spending Is $7 Million

question 40

Multiple Choice

Consumption is $6 million, planned investment spending is $7 million, government purchases are $10 million, and net exports are equal to $2 million. If GDP during that same time period is equal to $24 million, what unplanned changes in inventories occurred?

• A)There was an unplanned decrease in inventories equal to $3 million.
• B)There was no unplanned change in inventories.
• C)There was an unplanned increase in inventories equal to $3 million.
• D)There was an unplanned decrease in inventories equal to $19 million.

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Definitions:

Trade Discount

A reduction in the list price granted by a supplier to a buyer, often based on the volume of goods purchased or to maintain a competitive advantage.

Free On Board

A shipping term indicating whether the seller or the buyer is responsible for goods that are damaged or destroyed during shipping.

Sales Tax

A government-imposed charge on the sale of goods and services.

Account Receivable

Money owed to a business by its clients or customers for goods or services delivered but not yet paid for.