All categories

2 years ago

In early 2018 businesses bought more inventory, increasing GDP. What would happen

Business

1 answer:

puteri [66]2 years ago

4 0

Answer:

If a company increases its final goods inventory level, that will increase the country's GDP even if the goods are not sold during the current period (they will be sold in future periods). Increases in inventory level are considered part of Investment component of the GDP.

If the inventories are not sold during the year (2018) and if they continue to be unsold during part of 2019, that will negatively affect the GDP because fewer goods will be purchased to replenish these inventories and the market price of the goods will also decrease. The market price of goods is determined by the supply and demand. If the supply is much higher than the demand and inventories start to pile up, their price will decrease in order to increase the quantity demanded. If the volume of the goods in inventory is significant enough, this should lower the inflation rate.

You might be interested in

List the 6 factors that cause a shift in demand

olya-2409 [2.1K]

Answer:

1. Tastes and Preferences of the Consumers

2. Income of the People

3. Changes in Prices of the Related Goods

4. Advertisement Expenditure

5. The Number of Consumers in the Market

6. Consumers’ Expectations with Regard to Future Prices

Explanation:

4 0

2 years ago

Boyd Docker recorded the following transactions during the month of April. Apr. 3 Cash 3,400 Service Revenue 3,400 16 Rent Expen

Nutka1998 [239]

Answer:

$6,450

Explanation:

The general ledger of a cash account is presented below:

Cash Account

Date Particulars Amount Date Particulars Amount

April 1 Beginning April 16 Rent expense $460

Balance $3,850

April 3 Service April 20 Salaries and

Revenue $3,400 Wages expense $340

April 30 Ending balance $6,450

The ending balance would be

= Beginning balance + service revenue - rent expense - salaries and wages expense

= $3,850 + $3,400 - $460 - $340

= $6,450

6 0

2 years ago

Bank A offers to lend you money at 10 percent compounded monthly, Bank B at 11 percent compounded quarterly, and Bank C at 12 pe

ahrayia [7]

Answer and Explanation:

The computation is given below:

For Bank A,

Effective annual rate is

= (1 + 0.10 ÷ 12)^12 - 1

= 10.47%

For Bank B,

Effective annual rate is

= (1 + 0.11 ÷ 4)^4 - 1

= 11.46%

And,

For Bank C,

Effective annual rate = 12%

Therefore, Bank A is best to borrow at lowest effective annual rate

8 0

2 years ago

their major products, the plastic container. Budgeted quantity Budgeted price Direct materials 0.25 pounds $30 per pound Direct

pshichka [43]

Answer:

Total Material cost variance $5,600 favorable

Explanation:

The direct matriculate total variance is he difference between the standard material cost for the actual output achieved and the actual material cost of the same output

Standard materiel cost per unit = 0.25 × $30 = $7.5 per unit

5,000 units should have cost (5000× $7.5) = 37,500

but did cost (actual cost 1,000 × $29 31,900

Total Material cost variance 5600 favorable

3 0

2 years ago

Clam gulch is a very popular clamming beach in alaska. on good low tides, clammers can easily gather 60 clams (the state limit).

Ahat [919]

The way economists would probably explain the wastage of this clam resource is by saying that clams are free goods and are therefore subject to the tragedy of the commons effect. The tragedy of the commons effect is a theory in economics, postulated by the Victorian economist William Forster Lloyd.

The tragedy of the commons effect describes a condition within a shared-resource system where each user act freely according to their own self-interest, but their collective actions ends in the depletion or spoilage of that resource, thus having a negative impact on the common good of all users. In this case, commons is taken to refer to the clam resources.

6 0

2 years ago