1.

In an economy, the value of inventories rose from $100 billion in 2000 to $150 billion in
2001. In calculating total investment for 2001, national income accountants would:
A)
decrease it by $50 billion.
B)
increase it by $50 billion.
C)
decrease it by $100 billion.
D)
increase it by $150 billion.
Ans: B we only calculate new output (i.e. the extra 50 billion). The other 100 is inventory
form last year