In Aggregate Spending, Investment Does Not Include _____

question 101

Multiple Choice

In aggregate spending, investment does not include _____

• A) buying stocks and bonds.
• B) a new housing development.
• C) net increases to inventories.
• D) purchases of equipment.
• E) building a new factory.

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Definitions:

Realizability

The ability or likelihood of an asset to be converted into cash or an asset expected to bring cash inflows through revenue.

Accrual Accounting

An accounting method that records revenues and expenses when they are earned or incurred, regardless of when cash transactions occur.

Revenue Recognition

The accounting principle that dictates the specific conditions under which revenue is recognized and recorded, typically when the earning process is judged to be complete and the revenue is measurable.

Period Of Sale

The time frame during which a sale transaction is completed, from the offer to the transfer of ownership.