When estimating GDP, changes in the level of inventory are calculated because:
A)it indicates the level of employment in the economy.
B)it provides information about a firm's expectations.
C)it is a good indicator of the competitiveness of the economy.
D)it shows the level of business spending by firms.
E)it determines the value of goods produced in a year but not sold in that year.

Question

Quizplus · Accepted Answer

Changes in the level of inventory are included in GDP calculations because they represent the value of goods that were produced but not sold in a given year. Including this value in GDP ensures that the total value of goods and services produced in the economy in a year is accurately accounted for.

When Estimating GDP, Changes in the Level of Inventory Are