Fun Times produced $60m worth of toys in 2009. Because of a slow Christmas shopp
ID: 1211117 • Letter: F
Question
Fun Times produced $60m worth of toys in 2009. Because of a slow Christmas shopping season only $50m worth was sold to consumers, and the remaining $10 worth went into iventories. Based on this information, how was GDP affected in 2009?
a. $60m was added to GDP; $50m was classified as consumption spending and $10m was classified as private investment
b. $60m was added to GDP; all classified as consumption spending
c. $50m was added to GDP; all classified as consumption spending
d. $40m was added to GDP; $50m was classified as consumption
e. $40m was added to GDP; all classified as consumption spending
Explanation / Answer
a. $60m was added to GDP; $50m was classified as consumption spending and $10m was classified as private investment
As change in Inventory is the component of Private Investment in GDP calculation.
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