Which One of the Following Would Count as Investment in the National

question 25

Multiple Choice

Which one of the following would count as investment in the national income accounts?

• A) purchase of a new airplane by an airline
• B) purchase of a U.S. government bond
• C) purchase of 100 shares of Wal-Mart stock
• D) purchase of an existing house

---

Definitions:

Short Run

A time frame in economics during which at least one input is fixed, limiting the ability of businesses to adjust production levels quickly.

Marginal Cost

The swell in cumulative expenditure due to the manufacture of an additional unit of a product or service.

Total Revenue

Total Revenue refers to the total receipts from sales of goods or services that is calculated by multiplying the price per unit by the number of units sold.

Profits

The financial gain that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes.