A good is produced by a firm in 2007,added to the firm's inventory in 2007,and sold to a household in 2008.It follows that

Question

Quizplus · Accepted Answer

When the good is added to the firm's inventory in 2007, it counts as investment and is added to the investment category of 2007 GDP. However, when it is sold to a household in 2008, it becomes a final good and is counted in the consumption category of 2008 GDP. Therefore, the value of the good is subtracted from the investment category of 2008 GDP to avoid double-counting, resulting in the answer of B.

A Good Is Produced by a Firm in 2007,added to the Firm's