During the third quarter of this year a firm produces consumer goods and adds some of those goods to its inventory.During the fourth quarter of this year,the firm sells the goods at a retail outlet,with the result that the value of its inventory at the end of the fourth quarter is smaller than the value of its inventory at the end of the third quarter.These actions affect which component(s)of fourth-quarter GDP?

Question

Quizplus · Accepted Answer

The sale of goods increases consumption, while the reduction in inventory decreases investment.

During the Third Quarter of This Year a Firm Produces