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The net exports effect is the ______________ relationship between net exports and the price level of an economy.
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- An article on bloomberg.com stated that "inventories gave GDP a small boost."Source: Katia Dmitrieva, "U.S. GDP Grows at 2.6% Pace as Business Spending Accelerates," bloomberg.com, February 28, 2019.For this result to occur, is it likely that inventories increased or decreased? Briefly explain.A.Increased, since inventories are part of a firm's investment, which is a component of GDP, inventories must have risen.B.Increased, because firms earned profits on their inventories, which would raise inventory investment.C.Decreased, because inventories represent goods that firms did not sell, indicating a loss to inventory investment.D.This cannot be determined since there is no direct relationship between inventory changes and GDP growth.
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