In National- Income Accounting, Which of the Following Transactions by Households

question 39

Multiple Choice

In national- income accounting, which of the following transactions by households is considered to be an investment expenditure?

• A)the purchase of an imported car
• B)the purchase of a DVD player
• C)the purchase of a Guaranteed Investment Certificate (GIC)
• D)payment for the construction of a custom- built new home
• E)the purchase of a government bond

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Definitions:

Required Return

Required Return is the minimum annual percentage earned by an investment that will induce individuals or companies to put their money into a particular security or project.

Stock Price

The cost of purchasing a share of a company as quoted on the stock exchange.

Dividend Growth Rate

The annualized percentage rate of growth of a company's dividend payments to its shareholders.

Required Return

The minimum return that an investor expects to receive from an investment to compensate for its risk.