Question

stion 11 of 21 The term inventories is best described as O a consortium of inventors where new products are tested. O a statistical method used to forecast business sales. O goods that have been produced but remain unsold. items returned by customers and resold at a discount. O computer models to keep track of shipments. Actual investment spending tends to be different from planned investment spending. Which of the choices best explains why this is true? The government often intervenes to limit the amount of business investment spending. O Strikes by organized workers happen with more frequency than before. Firms are unable to perfectly anticipate sales of their products. Consumer spending typically does not change from year to year.

Answer 1

11) ans is C. Inventory investment is the unsold goods which are produced. It is an increase in stock either in raw material or finished goods

2)ans is C. Since firms sometimes can’t estimate/predict the exact sale due to which there is mismatch between quantity produced and sold which causes unintended inventories and thus planned investment is different between actual investment