Please answer question 11 soon.
Dear Student,
Change in inventory will occur when a firm is unable to sell all it's annual output.Such goods will be placed in a warehouse.The positive effect if change in inventory is that it is treated as an act of investment spending because the goods will be availabe for future use which satisfies the technical condition of an investment.Large changes in inventories signals changes in aggregate demand and thus,are indicators of future economic activity.Thus change in inventories is a flow equal to change in stock of unsold goods,so they are a form of investment.
Regards
Change in inventory will occur when a firm is unable to sell all it's annual output.Such goods will be placed in a warehouse.The positive effect if change in inventory is that it is treated as an act of investment spending because the goods will be availabe for future use which satisfies the technical condition of an investment.Large changes in inventories signals changes in aggregate demand and thus,are indicators of future economic activity.Thus change in inventories is a flow equal to change in stock of unsold goods,so they are a form of investment.
Regards