A Firm Produces Consumer Goods and Adds Some to Inventory

Multiple Choice

A firm produces consumer goods and adds some to inventory in the third quarter. In the fourth quarter the firm sells the goods at a retail outlet, leaving the firm's inventory diminished. As a result of these actions, what component(s) of GDP change in the fourth quarter?

A) only investment and it decreases
B) only consumption and it increases
C) investment decreases and consumption increases
D) neither investment nor consumption changes