Additions to inventory subtract from GDP, and when the goods in inventory are sold, the reductions in inventory add to GDP.

Question

Quizplus · Accepted Answer

Additions to inventory are considered investments and add to GDP when they occur, not when the goods are sold. When goods are sold from inventory, there is no direct effect on GDP, as the sale simply shifts the goods from business inventory to final consumption without altering the total GDP.

Additions to Inventory Subtract from GDP, and When the Goods