The statement is false. When goods are sold, their cost are transferred from finished goods to sold items.
Answer:
a. GDP will increase
b. No effect on GDP
c. GDP will increase
d. GDP will increase
e. GDP will rise
Explanation:
Gross domestic product is the total monetary value of all the finished goods produced in the country during a specific period. When a new house is constructed it will create value for the economy and GDP will rise but when an old house is resold again there is no addition in the monetary value so there will be no effect on GDP.
It's called perpetual. Perpetual inventory method updates inventory on a regular basis, as opposed to a periodic system, which updates at the end of a period.
