Which of the Following Is Included in the Investment Component

question 7

Multiple Choice

Which of the following is included in the investment component of GDP?

• A) purchases of previously owned homes
• B) purchases of government bonds
• C) purchases of new cars
• D) purchases of new houses

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Definitions:

Nominal Variable

A variable measured in terms of money that has not been adjusted for inflation, reflecting the current price level.

Real Variable

An economic measure that has been adjusted for changes in price level, enabling comparison of quantities across different times.

Excess Supply

A situation where the quantity supplied of a good or service exceeds the quantity demanded at the current price, often leading to a decrease in price.

Money Supply

The full amount of monetary assets in an economy at a particular time, covering cash, coins, and the amounts in checking and savings accounts.