In 2017 the Fancy Footwork Shoe Company delivered $1,000 worth of fancy shoes to a retail outlet.Only $200 worth were sold by the retail outlet in 2017.The remaining $800 worth of inventory,unsold in 2017,was eventually sold during 2018.What would the analysis of the national income accountants be?

Question

Quizplus · Accepted Answer

In 2017, $200 worth of shoes were sold, so consumption is $200. The remaining $800 is considered inventory investment in 2017. In 2018, when the $800 worth of shoes are sold, it is considered consumption, and the reduction in inventory is disinvestment.

In 2017 the Fancy Footwork Shoe Company Delivered $1,000 Worth