Match List-I with List-II:
| List-I | List-II | ||
|---|---|---|---|
| (A) | Inventory investment | (I) | A depletion of inventory |
| (B) | Positive inventory investment | (II) | Change in inventory |
| (C) | Negative inventory investment | (III) | The firm adds to or runs down inventories because sales differ from the planned level |
| (D) | Unplanned inventory investment | (IV) | A rise in inventory |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A) - (II), (B) - (IV), (C) - (I), (D) - (III)
Inventory investment is the change in a firm’s stock of goods. It can be positive or negative, and planned or unplanned.
| List-I | List-II | Reason |
|---|---|---|
| (A) Inventory investment | (II) Change in inventory | A change in inventory is called inventory investment. |
| (B) Positive inventory investment | (IV) A rise in inventory | A rise in inventory is positive inventory investment. |
| (C) Negative inventory investment | (I) A depletion of inventory | A depletion of inventory is negative inventory investment. |
| (D) Unplanned inventory investment | (III) The firm adds to or runs down inventories because sales differ from the planned level | When sales differ from the plan, the change in stock is unplanned. |
NCERT (2026-27): “4.2 Determination of Income in Two-sector Model … It should be noted that inventories or stocks refers to that part of output produced which is not sold and therefore remains with the firm. Change in inventory is called inventory investment. It can be negative as well as positive: if there is a rise in inventory, it is positive inventory investment, while a depletion of inventory is negative inventory investment. The inventory investment can take place due to two reasons: (i) the firm decides to keep some stocks for various reasons (this is called planned inventory investment) (ii) the sales differ from the planned level of sales, in which case the firm has to add to/run down existing inventories (this is called unplanned inventory investment).” |