A company produces an intermediate good on the last day of the year.If it is sold, GDP will not increase, but if it is not sold, GDP will increase.

Question

Quizplus · Accepted Answer

If the intermediate good is sold, it will be counted as part of final consumption expenditure, which is a component of GDP. If it is not sold, it will be counted as part of inventories, which is also a component of GDP. Therefore, in either case, GDP will increase.

A Company Produces an Intermediate Good on the Last Day