Income and Expenditure - Investment Spending - Inventories and Unplanned Investment Spending
5 important questions on Income and Expenditure - Investment Spending - Inventories and Unplanned Investment Spending
What are inventories? And what are 2 reasons to have inventories
To quickly satisfy the buyers
To be sure they have a steady supply of necessary materials and spare parts.
What is inventory investment? And can there be negative inventory investment? Why?
Inventory investment can be negative when a firm reduce its inventory over the course of a month.
What is the reason why increasing inventory investment can have a limit?
products can spoil
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What is the actual investment spending? And what does it consist of? Formula?
it consists of the panned investment spending plus the unplanned inventory investment.
I=Iunplanned+Iplanned
What are the indicators of the changes in inventories?
falling inventory investment indicate that there are negative unplanned inventory investment and a growing economy as sales are greater than forecasted
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