Of the Following Items, Which One Would Be Considered as Investment

question 129

Multiple Choice

Of the following items, which one would be considered as investment in the National Income and Expenditure Accounts?

• A)The purchase of a new van by a potter who packs it with his wares and travels to art shows on weekends.
• B)The purchase of 100 shares of Bell Canada stock on the Toronto Stock Exchange.
• C)The purchase of a 100-year-old house that was put on the protected historic sites list.
• D)The purchase of a Canadian government bond.
• E)Your purchase of a new car.

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Definitions:

Sunk Costs

Expenses that have already been incurred and cannot be recovered or altered, and should not be considered in future business decisions.

Cash Flow

The cumulative sum of funds moving into and out of a company, particularly influencing its liquid assets.

Opportunity Costs

The advantages that a person, business, or investor loses by selecting one option instead of another.

Sunk Costs

Past expenses that have already been incurred and cannot be recovered, and therefore should not affect future business decisions.