GDP Has Four Parts: Consumption, Investment, Government Purchases, and Net

question 102

True/False

GDP has four parts: consumption, investment, government purchases, and net exports.

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Definitions:

Investment

The allocation of resources, usually money, in expectation of generating an income or profit.

Target Costing

A pricing method where the selling price is set first, and then the target cost for producing the product is determined by subtracting a desired profit margin.

Desired Return

The specific profit that an investor aims to achieve from an investment.

Investment

The allocation of resources, such as time, money, or effort, in something with the expectation of receiving a future return or profit.