The Purchase of Stocks and Bonds Is Included in Which

question 54

Multiple Choice

The purchase of stocks and bonds is included in which component of GDP?

• A)saving 
• B)investment 
• C)consumer spending 
• D)They are not included in GDP.

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Definitions:

Seasonal Stocks

Inventories that are built up in anticipation of predictable changes in demand that occur at certain times of the year.

EOQ

Economic Order Quantity is a formula used by businesses to determine the ideal order quantity that minimizes inventory costs including holding, shortage, and order costs.

Capital Cost

The upfront expenditure required to acquire or improve fixed assets such as buildings, machinery, or equipment, contributing to the productive capacity of a firm.

Hurdle Rate

The minimum rate of return on an investment that a business requires before it will proceed with the project.