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.

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Definitions:

Statistic

A single measure, reported as a number, used to summarize a sample of data.

Central Tendency

A measure that identifies the center of a data set, or where the bulk of the values lie, including mean, median, and mode.

Statistic

A statistic is a single measure, reported as a number, used to summarize a sample and to estimate the corresponding value in the larger population from which the sample was drawn.

Parameter

A parameter is a numerical characteristic of a population, such as its mean or standard deviation, as opposed to a statistic of a sample.