Inventory investment is:

Question

Quizplus · Accepted Answer

Inventory investment refers to the change in the level of inventories held by firms. It is a part of unplanned investment spending because it may occur due to unexpected changes in demand, supply chain disruptions, or production errors. Therefore, it may be positive or negative, depending on the circumstances. It is not a part of planned investment spending, which refers to the purchase of new capital goods to expand production. It is also not a part of consumption spending, as it is associated with goods that are not yet sold, rather than goods that have already been purchased by consumers.

Inventory Investment Is