At the end of the year, Ford realizes it has overproduced Fiestas, because 2,500 of them are left unsold. How is this accounted for in that year's GDP? The cars are:
A) considered inventory and their value will increase investment.
B) considered durable goods, and their value will increase consumption.
C) not counted until they are sold in next year's GDP.
D) considered a bad thing and reduce the value of investment.

Question

Quizplus · Accepted Answer

Unsold cars are considered inventory, which is part of investment in GDP accounting.

At the End of the Year, Ford Realizes It Has