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Question : Which of the following is not included in inventory investment when calculating national income?

Option 1: Change in sales during the year

Option 2: Change in stock of raw material

Option 3: Change in stock of semi-finished goods

Option 4: Change in stock of finished goods


Team Careers360 4th Jan, 2024
Answer (1)
Team Careers360 10th Jan, 2024

Correct Answer: Change in sales during the year


Solution : The correct option is a Change in sales during the year.

The change in sales during the year is not directly included in the calculation of inventory investment when determining national income. Inventory investment refers to the change in the stock of goods that businesses hold. It is calculated as the difference between the value of goods produced (output) and the value of goods sold (sales) during a specific period. The formula for inventory investment

Inventory Investment = Output − Sales.

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