If a firm finds that it has a larger stock of inventory at the end of the period than it had at the start, the difference would be:

Question

Quizplus · Accepted Answer

An increase in inventory is considered as a form of investment, as it represents an increase in the firm's capital stock. That is, the firm has invested in more goods to be sold at a later time. Hence, the difference would be counted as investment in the GDP calculation.

If a Firm Finds That It Has a Larger Stock