What Does Gross Private Domestic Investment Include

question 49

Multiple Choice

What does gross private domestic investment include?

• A) Business purchases of capital goods, all new construction, and purchases of consumer durable goods.
• B) Business purchases of capital goods, all new construction, and inventory investment.
• C) Business purchases of capital goods, all new commercial construction, and inventory investment.
• D) Business purchases of capital goods, all new residential construction, and inventory investment.
• E) Business purchases of all types of durable goods, all new construction, and inventory investment.

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Definitions:

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a specific price, over a specified period of time.

Equilibrium

A state in which market supply and demand balance each other, and as a result, prices become stable.

Quantity Supplied

The quantity of a product or service that suppliers are ready and capable of offering for sale at a certain price during a defined timeframe.

Equilibrium Price

The equilibrium price is the price at which the quantity of goods suppliers are willing to supply matches the quantity of goods consumers are willing to buy, leading to market equilibrium.