Asked by Michelle Marquez on May 16, 2024
Verified
Which of the following is not true?
A) The purchase of inventory is considered an investment in calculating GDP.
B) Inventory investment is always positive.
C) Inventory investment is very unstable.
D) During severe recessions,inventory investment is negative.
Inventory Investment
The purchase of goods and materials for future sale or use, regarded as a form of investment by a company.
GDP
Gross Domestic Product, which measures the total value of all goods and services produced within a country’s borders in a specific time period.
- Clarify the association between disposable income, consumption, and investment.
Verified Answer
MG
Miranda GregoryMay 21, 2024
Final Answer :
B
Explanation :
Inventory investment can be negative when firms sell off existing inventory rather than producing more, therefore it is not always positive.
Learning Objectives
- Clarify the association between disposable income, consumption, and investment.