Inventory investment includes spending on:
A) equipment and structures that businesses buy to use in production.
B) goods that businesses put aside in storage, including materials and supplies, work in progress, and finished goods.
C) goods that businesses produce to sell to other businesses.
D) capital equipment less depreciation expense.

Question

Quizplus · Accepted Answer

Inventory investment refers to the purchase of goods by businesses that are stored and later sold. This can include materials and supplies, work in progress, and finished goods. Option A refers to capital investment in equipment and structures, while option C refers to sales to other businesses, which is not the same as inventory investment. Option D refers to the net investment in capital equipment, and does not necessarily include spending on inventory.

Inventory Investment Includes Spending On