Which of the Following Is Not a Component of Gross

question 22

Multiple Choice

Which of the following is not a component of gross private domestic investment spending?

• A) An increase in business inventories
• B) The extensive renovation of an old factory building
• C) A consumer's purchase of a brand new condominium
• D) The purchase of stock in the General Electric Company

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Definitions:

EBIT

Earnings Before Interest and Taxes; a measure of a firm's profit that includes all expenses except interest and income tax expenses.

Debt/Assets Ratio

A financial ratio that indicates the proportion of a company's assets that are financed by debt.

Common Equity

The amount of ownership interest that is common stockholders have in a company, reflecting their equity stake.

Borrow

The act of receiving funds from a lender with the agreement to return the principal amount along with interest or other charges, if applicable.