In 2016 final sales equal $500 billion and the change in business inventories is -$40 billion. GDP in 2016 is
A) -$40 billion.
B) $460 billion.
C) $500 billion.
D) $540 billion.

Question

Quizplus · Accepted Answer

GDP is calculated as the sum of final sales and the change in business inventories. Therefore, GDP = $500 billion (final sales) + (-$40 billion) (change in inventories) = $460 billion.

In 2016 Final Sales Equal $500 Billion and the Change