Onsumer Goods That Are Produced, Go into Inventory, and Are

question 312

Multiple Choice

onsumer goods that are produced, go into inventory, and are not sold during the current period are

• A) counted as intermediate goods and so are not included in current period GDP.
• B) counted in current period GDP only if the firm that produced them sells them to another firm.
• C) included in current period GDP as inventory investment.
• D) included in current period GDP as consumption.

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Definitions:

Parol Evidence Rule

A legal principle that prevents parties in a dispute from presenting evidence of prior or contemporaneous agreements that contradict or modify the written terms of a final contract.

UCC 2-301

A provision under the Uniform Commercial Code (UCC) that emphasizes the importance of good faith in the performance or enforcement of contracts covered by the UCC.

Obligor

The party in a contractual agreement who is bound to provide a benefit or payment to another.

Assignment

A contracting party’s transfer of his or her rights to a contract to a third party.