If a toy store overestimates the demand for a toy in 2004 and, as a result, has an unexpectedly large number of toys in stock at the end of the year, the value of the inventory of these toys will be considered as:
a. investment in 2004
b. investment in 2005.
c. consumption in 2004.
d. consumption in 2005.
e. a part of GDP when the toys are sold.
a
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Private information is a situation in which
A) two parties to an exchange have information that is available to outsiders if they ask. B) one party to an exchange has information that is not available to the other. C) the marginal cost of a person's obtaining additional information is zero. D) the marginal cost of making information available to one more person is zero.
Suppose an agent must pay the full marginal cost for an item but splits the marginal revenue with the principal. As a result,
A) joint profit is maximized. B) joint profit is not maximized. C) the agent will not enter into such a contract. D) the agent wishes to sell as many items as he can.
Which of the following is NOT an advantage of a proprietorship?
A) They are easy to form and dissolve. B) Decision-making resides with one person—the owner. C) Liability of the owner is unlimited. D) Profits are only taxed once.
What is a key advantage of money over other financial assets such as stocks, bonds, precious metals or real estate?
What will be an ideal response?