In an economy, the value of inventories fell from $75 billion in 2012 to $63 billion in 2013.In calculating the total investment for 2013, national income accountants would:
A)decrease it by $75 billion.
B)increase it by $63 billion.
C)decrease it by $12 billion.
D)increase it by $138 billion.

Question

Quizplus · Accepted Answer

The decrease in the value of inventories represents a decrease in investment for the year. Therefore, national income accountants would need to decrease the total investment by the amount of the decrease in inventories, which is $12 billion ($75 billion - $63 billion).

In an Economy, the Value of Inventories Fell from $75