When a produces consumer goods and adds some to inventory rather than selling them, how is the increase in inventory.counted GDP

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When a produces consumer goods and adds some to inventory rather than selling them, how is the increase in inventory.counted GDP

Select one: in the current quarter GDP capital consumption allowance. bIt is counted in the current as investment. is counted in currerit GDP statistical discrepancy is counted the GDP as consumption

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1 answer:

SIZIF [17.4K] · Answer 1 · 2022-04-18T22:10:09+03:00

Answer:

It is counted in the current year as investment.

Explanation:

This type of spending is still included in the GDP because it's production. The definition of GDP is all final goods and services produced in the economy in one year. So even if these consumer goods are not sold, they were still produced.

We include them as investment, not consumption or government spending. Investment spending refers to the spending of firms or businesses; they're preparing in advance, investing in their future sales, if you will.