Explain why decreases in inventories are included as a negative number in gross private domestic investment
Decreases in inventories represent sales of goods that were produced in some past year. The sale of these
goods show up as consumption expenditures, government purchases, or net exports, and thus overstate
production in the current year. To adjust GDP to exclude the sale of these goods, their value is subtracted
from gross private domestic investment.
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Which of the following is NOT a benefit to an individual purchasing a mutual fund?
A) reduced risk B) lower transactions costs C) free-riding D) diversification
If supply and demand both simultaneously increase
A) the market clearing price definitely rises, and the equilibrium quantity definitely falls. B) the market clearing price definitely rises, and the effect on the equilibrium quantity is indeterminate. C) the market clearing price definitely falls, and the effect on the equilibrium quantity is indeterminate. D) the effect on the market clearing price is indeterminate, and the equilibrium quantity definitely rises.