Product method of national income accounting

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Explain how inventory investment affects the product method of national income accounting. Why might you want to split intended inventory accumulation from accidental inventory accumulation? If such inventories were not considered part of demand, how would our accounting identities change if at all? In some economic models, a measure of disposal income and subsequent output fall when unanticipated inventories increase. How might such a mechanism amplify falls in consumption?

Reference no: EM132234674

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