Identify the Impact of an Increase in the Inventory Stock

question 82

Multiple Choice

Identify the impact of an increase in the inventory stock during a year.

• A)Consumption spending will decrease thereby reducing the GDP.
• B)The GDP of the country should decrease by the amount of the increase in inventory.
• C)The capital investment in the country will increase.
• D)Neither the capital investment nor the GDP will change.
• E)The GDP of the country should increase by the amount of the increase in inventory.

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Definitions:

Maximum Contribution Limits

The highest amount that can be contributed to a retirement plan, savings account, or other tax-advantaged account in a given period without incurring penalties.

Qualified Pension Plan

A retirement plan that meets requirements set forth by the IRS, providing tax advantages such as tax-deferred growth on earnings and deductible contributions.

Employer-sponsored Retirement Plan

A retirement savings plan offered by employers to their employees, often with matching contributions.

AGI

Adjusted Gross Income, which is gross income minus adjustments to income, serving as the basis for calculating taxable income.