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If a Firm Produces 100 Units of a Particular Good

Question 96

Multiple Choice

If a firm produces 100 units of a particular good during a year and,of these,only 90 units are sold during the same year,then the 10 unsold units are treated as the firm's inventory investment expenditure for the year,as if the firm had bought the items for its stock of inventories from itself.For the economy as a whole,this accounting practice ensures that


A) production equals expenditure each year.
B) inventory investment is always positive each year.
C) capital consumption allowances are zero each year.
D) saving and investment are equal each year.
E) net private-sector investment is zero each year.

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