Inventory investment is a component of gross domestic product (GDP). What is produced in a certain country is naturally also sold eventually, but some of the goods produced in a given year may be sold in a later year rather than in the year they were produced. Conversely, some of the goods sold in a given year might have been produced in an earlier year. The difference between goods produced (production) and goods sold (sales) in a given year is called inventory investment. The term can be applied to the economy as a whole or to an individual firm.
Read more about Inventory Investment: Definition of Inventory Investment, Mathematical Relationship of Inventory Investment To Inventories, Intended and Unintended Inventory Investment, Relationship To Macroeconomic Equilibrium, Inventory Investment Over The Business Cycle
Famous quotes containing the word investment:
“The only thing that was dispensed free to the old New Bedford whalemen was a Bible. A well-known owner of one of that city’s whaling fleets once described the Bible as the best cheap investment a shipowner could make.”
—For the State of Massachusetts, U.S. public relief program (1935-1943)