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Changes in business inventories are: Multiple Choice classified as consumption expenditures. classified as investment expenditures. classified...

Changes in business inventories are:

Multiple Choice

  • classified as consumption expenditures.

  • classified as investment expenditures.

  • classified as government purchases.

  • excluded from GDP.

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Answer #1

Answer

Option 2

classified as investment expenditures

It is included in the investment expenditure as the inventories are investment spending. Change in inventories require new investment or changes the old investment and both changes taken in to account to calculated GDP.

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