Question

Question 2 2 pts Howard Nets & Co. is a basketball net making company. Last year, Howard Nets & Co. had $2,000 worth of inventories (stored basketball nets). This year, they produce $115,000 worth of basketball nets and sell $114,850 worth. What is the change in Howard Nets & Co.'s inventories and how much does Howard Nets & Co. contribute to GDP this year? 0 +$150 Inventories, +$114,850 GDP 0 +$150 Inventories, +$115,000 GDP O +$2,150 Inventories, +$115,000 GDP O +$2150 Inventories, +$114,850 GDP

Answer 1

2) This is the Inventory and GDP concept-based question: GDP means, in a specific period of time (generally one year) the market value of all finished goods and services which are produced domestically. Internationally produced goods and services not included in GDP because that may lead to double counting. Simply inventory means the collection of unsold products and that finished products are waiting to be sold. Last year, Howard Nets & Co. company's inventory value = $2000 This year, Howard Nets & Co. company's production value = $115,000 Sold worth = $114,850 Calculate this year, inventories: Inventories(Unsold production) = Total production - Sales =$115,000 - $114,850 = $150 Calculate the change in Howard Nets & Co's inventories: Change in Howard Nets & Co's inventories = Last year inventories+ This year inventories = $2000+ $150 = $2150 Howard Nets &Co. the company contributes $115,000 worth to this year. According to GDP, concept inventories are included in GDP. Thus, the current answer is +$2,150 Inventories, +$115.000 GDP.