Which of the Following Would Not Be Included in the Gross

question 196

Multiple Choice

Which of the following would not be included in the gross private domestic investment ( I ) category of GDP?

• A) A bakery's purchase of a new oven.
• B) A retailer's additions to its inventories.
• C) Newly built residential construction.
• D) A bank's purchase of a U.S. Treasury bond.

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Definitions:

Cost of Goods Manufactured

The total production cost of goods completed during a specific period, including materials, labor, and overhead.

Variable Costing

An accounting method that considers only variable costs as product costs and treats fixed costs as period costs.

Direct Costing

An accounting method that identifies variable costs directly associated with production and excludes fixed costs from product costing.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overhead - in the cost of a product.