An Increase in Fixed Investment Spending That Increases GDP Occurs

question 32

Multiple Choice

An increase in fixed investment spending that increases GDP occurs when

• A) a family purchases a new car.
• B) a business buys a new computer.
• C) inventories of new cars are drawn down on the lots of car dealers.
• D) the government builds a new office building.

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Definitions:

Property Taxes

Taxes levied on property owners based on the assessed value of their property, often used to fund local services and infrastructure.

Unexpected Increase

An unforeseen rise in a particular variable or metric, which could pertain to costs, prices, demand, or any other economic factor.

Equilibrium Price

The market price where the quantity of goods supplied is equal to the quantity of goods demanded.

Equilibrium Quantity

The quantity of goods or services at which supply equals demand, leading to market stability.