The Local Car Dealership Has an Increase in Inventory of 100

question 106

Multiple Choice

The local car dealership has an increase in inventory of 100 newly produced cars in 2015.In 2016,it sells all 100 cars.Which of the following statements is correct?

• A)The value of the cars in inventory will be counted as part of 2015 GDP,and the value of the cars sold in 2016 will not increase 2016 GDP.
• B)The value of the cars in inventory will not affect 2015 GDP,and the value of the cars sold in 2016 will increase 2016 GDP.
• C)The value of the cars in inventory will be counted as part of 2015 GDP,and the value of the cars sold in 2016 will increase 2016 GDP.
• D)The value of the cars in inventory will not affect 2015 GDP,and the value of the cars sold in 2016 will not increase 2016 GDP.

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Definitions:

Future Value

The value of an investment or asset at a specified future date based on assumed rates of growth or interest.

Present Value

The valuation at present of a future sum of money or sequence of cash inflows, applying a specified rate of return.

Interest Rate

The percentage of a sum of money charged for its use, reflecting the cost of borrowing money or the return on invested savings.

Real Interest Rate

The interest rate adjusted for inflation, representing the real cost of borrowing or the real yield to lenders and investors.