Increases in unwanted business inventories are counted as

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Increases in unwanted business inventories signify that businesses are producing more goods than are being sold, leading to an excess supply of goods. To reduce the inventories and balance supply with demand, businesses will typically decrease their production levels, which is classified as a reduction in investment. Therefore, an increase in unwanted business inventories is counted as an increase in investment.

Increases in Unwanted Business Inventories Are Counted as