In an Economy, the Value of Inventories Was $75 Billion

question 113

Multiple Choice

In an economy, the value of inventories was $75 billion in 2009 and $63 billion in 2010. In calculating total investment for 2010, national income accountants would:

• A) Decrease it by $75 billion
• B) Increase it by $63 billion
• C) Decrease it by $12 billion
• D) Increase it by $138 billion

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Definitions:

Vertical Analysis

A method of financial statement analysis in which each line item is listed as a percentage of a base figure, facilitating comparison across different periods and companies.

Base Amount

The initial sum of money or level of quantity that serves as a starting point for calculations or adjustments.

Financial Statement Data

Refers to quantitative information extracted from a company's financial statements, used to assess its financial health.