They are a type of investment, sometimes referred to as involuntary investment, because the change in inventories is a flow equal to the change in the stock of unsold items.
A portion of the gross domestic product (GDP) is investment in inventory. Naturally, what is created in a country ultimately finds its way into the market, although some of the products produced in a particular year could be sold in the next year rather than the one in which they were made. In contrast, some of the products that are sold in a particular year may have been made in a previous year. Inventory investment is the difference between the amount of products produced and sold in a particular year. Although the idea may be used with either the economy as a whole or a specific company, macroeconomics is where it is most often used (economy as a whole). Unintentional product inventory raises inventory investment.
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