Which of the Following Items Is the One Type of Household

question 74

Multiple Choice

Which of the following items is the one type of household expenditure that is categorized as investment rather than consumption?

• A)spending on education
• B)the purchase of stocks and bonds
• C)the purchase of a new house
• D)the purchase of durable goods such as stoves and washing machines

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Definitions:

Investment Turnover

A component of the rate of return on investment, computed as the ratio of sales to invested assets.

Return on Investment

A measure used to evaluate the efficiency of an investment, calculated by dividing the profit gained on an investment by the cost of the investment.

Indirect Expense

Costs incurred that are not directly tied to the production of goods or services, such as rent, utilities, and administrative salaries.

Depreciation Expense

Depreciation expense is the allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value due to wear and tear, decay, or obsolescence.