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Macroeconomics

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GDP Transactions: Canned Soup

MACRO-KBNGSV

Assume \$300 of canned soup produced in year 1 is not sold until year 2. Which of the following GDP transactions is correct?

A

The canned soup sale will add to total GDP in year 2, when it is consumed.

B

In year 2, investment will fall by \$300 and consumption will increase by \$300.

C

In year 1 consumption is improperly inflated by $300.

D

The net change in GDP in year 2 is a positive $300.

E

Over the two years, there is no change in GDP since the soup was not consumed when it was produced.