Which of the following about inventory changes and GDP is true?
A) Inventory investment adds to GDP because it represents goods produced during the current period.
B) Inventory investment is subtracted from GDP because the goods were not sold during the period.
C) Inventory investment does not affect GDP because the goods were not sold during the period.
D) Inventory investment does not affect GDP because it does not represent goods produced during the period.

Question

Quizplus · Accepted Answer

Inventory investment adds to GDP because it represents goods produced during the current period. When businesses produce goods, they count as part of GDP, even if they are not sold yet. The value of these goods is included in the calculation of GDP as inventory investment.

Which of the Following About Inventory Changes and GDP Is