Suppose the clothing manufacturer, Eddie Bauer, produced 10,000 pairs of jeans in 2005 but sold only 9,200 pairs. How will this be recorded in GDP accounts?
A) The 9,200 pairs that were sold will be counted under the consumption component of GDP in 2005 and the 800 pairs that were not sold will not be included in GDP.
B) The 10,000 pairs of jeans produced would be counted as investment and will be included in GDP in 2005.
C) The 9,200 pairs sold will be counted as consumption and the 800 pairs that were not sold will counted as investment and both items will be included in GDP in 2005.
D) The 9,200 pairs sold will be counted under the consumption component of GDP in 2005 and the 800 pairs that were not sold will be included in GDP in 2006.

Question

Quizplus · Accepted Answer

The 9,200 pairs sold are counted as consumption, and the 800 unsold pairs are counted as inventory investment, both included in GDP for 2005.

Suppose the Clothing Manufacturer, Eddie Bauer, Produced 10,000 Pairs of Jeans