The change in business inventories is measured as
A) final sales minus GDP.
B) final sales plus GDP.
C) GDP minus final sales.
D) the ratio of final sales to GDP.

Question

Quizplus · Accepted Answer

The change in business inventories is measured as GDP minus final sales. This is because final sales represent the total demand for goods and services produced, and any goods that are produced but not sold must be added to inventories. Therefore, the change in inventories reflects the difference between the amount of goods produced and the amount of goods sold.

The Change in Business Inventories Is Measured as