In an Economy, the Value of Inventories Fell by $50

question 199

True/False

In an economy, the value of inventories fell by $50 billion from Year 1 to Year 2.In calculating total investment for Year 2, national income accountants would increase it by $50 billion.

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Definitions:

Annual Rate

The interest rate for a period of one year, often used for comparing the annual interest of financial products.

Discount Rate

The interest rate charged by central banks on loans to commercial banks or the rate used in discounted cash flow analysis to determine present value.

Simple Interest

Interest determined strictly on the base amount, or on the unpaid segment of that base amount.

Term Deposit

A deposit held at a financial institution for a fixed term that offers a fixed interest rate, where withdrawing money before the term ends usually incurs a penalty.