Suppose that a department store added domestically-produced refrigerators to its inventory in June 2016 because it expected an increase in demand for them. The store miscalculated the preferences of its customers, however, and was not able to sell the refrigerators until January 2017. The refrigerators added to the store's inventory in June 2016:1. will be counted in 2017 GDP because they were sold that year. 2. will not be counted in 2016 GDP because they were intermediate goods that year. 3. will be counted in 2016 GDP as part of consumption (C).4. will be counted in 2016 GDP as part of investment (I).

Question

Junior Montgomery

Business

21 November, 11:12

Suppose that a department store added domestically-produced refrigerators to its inventory in June 2016 because it expected an increase in demand for them. The store miscalculated the preferences of its customers, however, and was not able to sell the refrigerators until January 2017. The refrigerators added to the store's inventory in June 2016:1. will be counted in 2017 GDP because they were sold that year. 2. will not be counted in 2016 GDP because they were intermediate goods that year. 3. will be counted in 2016 GDP as part of consumption (C).4. will be counted in 2016 GDP as part of investment (I).

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Easton Webster · Answer 1

1. will be counted in 2017 GDP because they were sold that year.

Explanation:

Remember, mention was made that it was in the following year the domestically-produced refrigerators weree sold by the departmental store which were bought in 2016.

Based on the definition of Gross domestic product; a measure in monetary terms of the total number of goods and services produced in a country in a period of one year, thus the monetary value was transferred when the refrigerators were sold, which is 2017.