In One Year,a Firm Increases Its Production by $9 Million

question 110

Multiple Choice

In one year,a firm increases its production by $9 million and increases sales by $8 million.All other things in the economy remaining the same,which of the following is true?

• A)GDP increases by $8 million and inventory investment decreases by $1 million.
• B)GDP increases by $9 million and inventory investment increases by $1 million.
• C)Inventory investment decreases by $1 million.
• D)GDP increases by $8 million and investment increases by $1 million.
• E)GDP increases by $17 million.

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Definitions:

Cash Is Received

The acquisition of monetary funds through various means, such as sales, financing, or donations.

Accrued

Refers to amounts that are recognized in the financial statements before the cash transactions occur, representing liabilities for goods and services received but not yet paid.

Routine Entry

Repeated and standard accounting entries made for recurring transactions within a business's financial records.

Expense

An outflow of cash or other valuable assets from a person or company to another entity in exchange for goods or services.