The Investment Spending Component of GDP Includes All of the Following

question 89

Multiple Choice

The investment spending component of GDP includes all of the following except:

• A) business fixed investment.
• B) net foreign investment.
• C) residential investment.
• D) inventory investment.

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Definitions:

Residual Dividend Approach

Policy where a firm pays dividends only after meeting its investment needs while maintaining a desired debt–equity ratio.

Debt-Equity Ratio

A financial metric showing the mix of debt and equity used by a company to support its assets.

Investment Needs

The required capital an individual or organization needs to achieve financial goals.

Low-Dividend Clientele

Investors who prefer companies that offer lower dividend payments because they are in lower income tax brackets or have different investment goals.