Suppose a TV manufacturing unit wants to raise its inventories from 1000 units to 2000 units during the year. Expecting sale of 5000 units during the year, the firm produces 5000+1000= 6000 TV sets. Actual sale for the firm are 5000 TV sets during the year. This is an example of:

Question

Option 1: Planned accumulation of inventories.

Option 2: Unplanned accumulation of inventories

Option 3: Planned decumulation of inventories

Option 4: Unplanned decumulation of inventories

AfterBoards · Accepted Answer

The answer is 'Planned accumulation of inventories.'. View full solution:

	List - I		List - II
(A)	Marginal Propensity to Save	(I)	$\frac{\Delta Y}{\Delta I}$
(B)	Average Propensity to Consume	(II)	$\frac{\Delta S}{\Delta Y}$
(C)	Value of Investment Multiplier	(III)	1 - APS
(D)	Marginal Propensity to Consume	(IV)	$\frac{\Delta C}{\Delta Y}$

CUET Economics PYQs

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