Question

At the end of 2020, General Motors has not sold 10% of the trucks they produced...

At the end of 2020, General Motors has not sold 10% of the trucks they produced that year. How is this accounted for in the GDP of 2020?

Group of answer choices

The cars are considered durable goods, and their value will increase consumption spending.

None of these statements is true.

The cars are considered inventory and their value will increase investment spending.

The cars are not counted until they are sold in next year's GDP.

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Answer #1

Answer : The answer is option C.

Here 10% of trucks is not sold in 2020 which was produced in that year. Hence this 10% of trucks will be considered as inventory. Inventory of a year increase the investment spending of GDP if it is produced in that year. Hence here the 10% of trucks will be considered as inventory which will increase the investment spending of GDP. For this reason except option C other options are not correct. Therefore, option C is the correct answer.

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