A business produced $10 million of goods in 2010 but sold only $9 million. Is the $1 million increase in inventory counted as part of the 2010 gross domestic product?
a. No, because inventories are intermediate goods.
b. No, because if these inventories were sold in 2011, they would be counted twice.
c. Yes, because these inventories are part of the output of the economy in 2010.
d. Yes, but they will be added to the 2010 GDP only if they are sold in 2011.
C
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To fully analyze the effects of a tariff on imports of tomatoes, an economist needs
a. only to know the supply and demand curves in the market for tomatoes. b. only to know about supply and demand in the market for tomatoes and in markets for other products tomato farmers grow. c. to use general equilibrium analysis. d. to use a production possibilities curve.
Consumer surplus is
a. the difference between the price of the good and the cost to produce the good. b, the sum of what consumers are willing to pay and the price of the good. c. the difference between what consumers are willing to pay and the price of the good. d. the difference between the cost to produce the good and the amount consumers are willing to pay for the good.
At a price of $20 each, the demand for t-shirts from a group's fundraising activity is unit elastic. Thus, the group's total revenue from selling t-shirts ________ at a price of $20 each.
A. will equal $0 B. will equal $1 C. reaches its minimum D. reaches its maximum
Refer to Scenario 3.2 below to answer the question(s) that follow.SCENARIO 3.2: Lettuce and spinach are substitutes. Lettuce and tomatoes are complements. Lettuce is a normal good. During the winter, about 20% of the lettuce crop was destroyed by flooding.Refer to Scenario 3.2. As a result of the flooding during the winter, you would expect that
A. the price of lettuce would increase, the supply of lettuce would increase, and the quantity demanded of lettuce would decrease. B. the supply of lettuce would decrease, the price of lettuce would increase, and the quantity demanded of lettuce would decrease. C. the supply of lettuce would decrease, the price of lettuce would increase, and the demand for lettuce would decrease. D. the price of lettuce would increase and both the quantity of lettuce supplied and the quantity of lettuce demanded would increase.