Suppose That in 2015,Canada Cars Corporation Produced $20 Million Worth

question 53

Multiple Choice

Suppose that in 2015,Canada Cars Corporation produced $20 million worth of cars and trucks but was able to sell only $16 million worth.Is the remaining $4 million increase in inventories part of GDP for 2015? 1.Yes,since changes in inventories are part of consumption expenditures.
2.Yes,since they are part of the economy's output in 2015.
3.Yes,since changes in inventories are part of actual investment.

• A)1 only
• B)2 only
• C)3 only
• D)both 1 and 2
• E)both 2 and 3

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Definitions:

Raw Materials

Basic items or goods used in the production of goods or services, which can include commodities or components before they are processed or used in manufacturing.

Indirect Materials

Materials used in the production process that are not directly included in the final product.

Indirect Labor

Refers to wages paid to employees who are not directly involved in the production of goods but support those who are.

Cost Elements

Cost Elements are the various types of expenses incurred in the production of goods or services, including materials, labor, and overhead.