Asked by Darian Clark on Apr 24, 2024
A net increase in inventories is considered as investment for the current year.
Net Increase
The amount by which something grows or goes up, calculated by taking total gains and subtracting any losses.
Inventories
The stock of goods or materials that a company holds for the ultimate goal of resale or production.
Investment
The purchase of new plants, new equipment, new buildings, and new residences, plus net additions to inventories.
- Understand the concept of investment in the context of GDP and how changes in inventories affect GDP calculations.
Learning Objectives
- Understand the concept of investment in the context of GDP and how changes in inventories affect GDP calculations.
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