In an economy,the value of inventories fell from $75 billion in 2012 to $63 billion in 2013.In calculating total investment for 2013,national income accountants would:
A) decrease it by $75 billion.
B) increase it by $63 billion.
C) decrease it by $12 billion.
D) increase it by $138 billion.

Question

Quizplus · Accepted Answer

The decrease in the value of inventories from $75 billion to $63 billion represents a decrease of $12 billion. However, this decrease in inventory value does not affect total investment in 2013 since it is already accounted for in the investment made in 2012. Therefore, national income accountants would not make any adjustments to total investment in 2013 based on the change in inventory value.

In an Economy,the Value of Inventories Fell from $75 Billion