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Question
A shoe manufacturer produces 10,000 pairs but sells only 7,000 because of a sudden drop in demand. What do the 3,000 unsold pairs represent?
Options
Purchase of existing paper securities
Unplanned inventory investment
Replacement Investment
Autonomous investment
MCQ
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Solution
The 3,000 unsold pairs add to the firm's inventory without being intended. They count as unplanned inventory investment in ex-post investment.
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