Ayushi Asked a Question
August 13, 2020 12:39 pmpts 30 pts
65. "High demand in this year's economy caught producers unaware, forcing their inventories to absorb this demand." How does this inventory change appear in the GDP calculation when adding up all expenditures? (1) It is added when measuring GDP, as an element of investment demand (2) It is added when measuring GDP, as an element of consumption demand (3) it is subtracted when measuring GDP, as an element of investment demand (4) It is subtracted whcn measuring GDP, as an element of consumption demand
  • 1 Answer(s)
  • 0 Likes
  • 1 Comments
  • Shares
  • Nidhi taparia Best Answer
    Okay this is entirely a trick question I believe. When firms are selling out of inventory, investment expenditure will definitely get reduced because of the negative change in sto...
    Show more
    Likes(0) Reply(0)