Which of the following observations concerning GDP calculations is true?
A)Goods and services produced by governments are valued at market price.
B)Inventories are treated as if they are yet to be sold.
C)Goods produced but not sold during the year are counted in that year's GDP.
D)Goods that firms add to their inventories do not count in the GDP.

Question

Quizplus · Accepted Answer

Goods produced but not sold within the year are indeed counted in that year's GDP. This includes goods added to inventories, as the production of these goods contributes to the total output of the economy within that period.

Which of the Following Observations Concerning GDP Calculations Is True