If firms sell less than is expected, actual investment increases because ________, which is counted as investment.
A)the unsold goods are added to inventory
B)the government buys the unsold goods
C)the unsold goods are distributed to poor households
D)households buy the unsold goods are bargain prices

Question

Quizplus · Accepted Answer

Changes in inventory are part of investment, so when unsold goods are added to inventory, investment increases, even though this would be unintended investment.

If Firms Sell Less Than Is Expected, Actual Investment Increases