In Computing GDP, What Is Investment

question 65

Multiple Choice

In computing GDP, what is investment?

• A) spending on stocks, bonds, and other financial assets
• B) spending on real estate and financial assets
• C) spending on new capital equipment, inventories, and structures, including new housing
• D) spending on capital equipment, inventories, and structures, excluding household purchases of new housing

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Definitions:

Rose Pollen

The fine powder produced by the male parts of a rose flower, necessary for the fertilization process in plant reproduction.

Market Failure

A situation in which the allocation of goods and services by a free market is not efficient, often justifying government intervention.

Misallocated

Describes resources or efforts that are used inefficiently or inappropriately, leading to suboptimal outcomes.

Perfectly Competitive

A market structure characterized by a large number of small firms, homogeneous products, and free entry and exit, leading to price takers rather than makers.