Additions to inventory is
A) not counted as an expenditure in GDP accounting.
B) counted as an intermediate input.
C) counted as a component of investment spending.
D) subtracted from sales revenue in calculating profit income.
E) considered national savings.

Question

Quizplus · Accepted Answer

Additions to inventory are considered investment spending as they represent the purchase of goods that will be sold in the future. They are not counted as an intermediate input or national savings, and are not subtracted from sales revenue in calculating profit income. While they do represent a monetary value, they are not considered a final good or service, and so are not counted as part of GDP accounting.

Additions to Inventory Is