Suppose the total market value of all final goods and services produced this year in economy X is $4 million. Of the $4 million worth of goods, $3 million is sold and $1 million is held in inventory. For this year, the GDP for economy X is

a. $4 million.

b. $3 million.

c. $1 million.

d. $7 million.

e. none of the above

Question

Nikolai Montgomery

Business

14 August, 15:07

Suppose the total market value of all final goods and services produced this year in economy X is $4 million. Of the $4 million worth of goods, $3 million is sold and $1 million is held in inventory. For this year, the GDP for economy X is

a. $4 million.

b. $3 million.

c. $1 million.

d. $7 million.

e. none of the above

+2

Answers (1)

Know the Answer?

Eileen Mendez · Answer 1

A) $4 million

Explanation:

The GDP is woth $4 million because GDP equals the sum of all produced goods and services, in a given year, within a country.

Inventories are part of GDP, counted as private investment, even if they are not sold. The reason for this is that firms payed someone for the inventory with the aim of earning a profit in the future, and assets that are purchased with the goal of getting economic benefit from their use, are qualified as investments.