In November 2017, General Motors produced an automobile that was delivered to a local dealership in December 2017.The auto was sold to Sharon Smith for personal use in February 2018.Following national income accounting practices, this auto would be counted as:
A)consumption in 2017 and 2018.
B)consumption in 2017 and investment in 2018.
C)disinvestment in 2017 and consumption in 2018.
D)investment in 2017 and disinvestment in 2018.

Question

Quizplus · Accepted Answer

The automobile is considered investment in 2017 when it was produced and added to inventory. When sold in 2018, it is considered disinvestment as it is removed from inventory and counted as consumption.

In November 2017, General Motors Produced an Automobile That Was