If closing stock is ₹90,000 less than opening stock, how will the change in stock be recorded in investment?
Answer and explanation
Correct answer: ₹90,000 negative
Change in stock is calculated as closing stock minus opening stock. Here, closing stock is ₹90,000 below opening stock, so the calculation gives a change of −₹90,000. A reduction may reflect the sale or use of goods produced earlier, and it is recorded as negative inventory investment. Consequently, it reduces the investment component in the expenditure method rather than increasing it or being ignored.
Frequently asked questions
What is the correct answer to this question?
₹90,000 negative
Why is this the correct answer?
Change in stock is calculated as closing stock minus opening stock. Here, closing stock is ₹90,000 below opening stock, so the calculation gives a change of −₹90,000. A reduction may reflect the sale or use of goods produced earlier, and it is recorded as negative inventory investment. Consequently, it reduces the investment component in the expenditure method rather than increasing it or being ignored.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates.
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