If Business Inventories Equal $40 Billion at the Beginning of the Year

question 119

Multiple Choice

If business inventories equal $40 billion at the beginning of the year and $55 billion at the end of the year, then, assuming no other changes, GDP must have:

• A)decreased by $15 billion.
• B)increased by $15 billion.
• C)increased by $40 billion.
• D)increased by $55 billion.

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Definitions:

Marginal Utility

The extra pleasure or advantage gained from using another unit of a product or service.

Consumption

The act of using goods and services by households or individuals for personal needs or to derive utility.

Marginal Utility

The added satisfaction or utility that a consumer receives from having one more unit of a good or service.

Macaroni and Cheese

A classic dish made by combining cooked macaroni pasta with a creamy cheese sauce.