Suppose that in 2000, Canada Cars Corporation produced $20 million worth of cars and trucks but was able to sell only $16 million worth. Is the remaining $4 million increase in inventories part of GDP for 2000? 1. Yes, since changes in inventories are part of consumption expenditures.
2. Yes, since they are part of the economy's output in 2000.
3. Yes, since changes in inventories are part of actual investment.
A) 1 only
B) 2 only
C) 3 only
D) both 1 and 2
E) both 2 and 3
Correct Answer:
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