When a firm produces consumer goods and adds some to inventory rather than selling it, how is the increase in inventory counted in GDP?

Question

Quizplus · Accepted Answer

The increase in inventory is counted as investment in the current quarter GDP because the firm has produced goods but not yet sold them, meaning they are holding onto them as an asset for future sales. Therefore, the value of the goods is added to the investment component of GDP.

When a Firm Produces Consumer Goods and Adds Some to Inventory