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Two Components of Investment Expenditures Are New Homes Purchased by Consumers

question 60

Essay

Two components of investment expenditures are new homes purchased by consumers and increases in inventories. Explain why these two components are included in investment expenditures when calculating GDP using the spending approach.


Definitions:

Everyday Activities

Routine actions or tasks that individuals perform in their daily lives.

Social Capital

The networks, norms, and social trust that facilitate coordination and cooperation among individuals within a society or group.

Potential Resources

Assets or capabilities that could be utilized or developed to achieve goals, but are not yet actively employed.

Constructive Resistance

A form of opposition or dissent that is aimed at bringing about positive change, often within organizational or social contexts.

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