According to the BEA, in the Second Quarter of 2012

question 130

Multiple Choice

According to the BEA, in the second quarter of 2012 business spending on equipment and software rose by 4.7 percent. Using the expenditure approach, this change increases

• A) gross private domestic investment.
• B) government expenditure on goods and services.
• C) net exports of goods and services.
• D) personal consumption expenditures.

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Definitions:

Fixed Factors

Inputs in the production process that remain constant and cannot be easily increased or decreased in the short term, such as machinery or land.

Economic Profits

Profits earned by a firm after accounting for both explicit and implicit costs, indicating the total returns exceeding the costs of all resources employed.

Economic Profit

The difference between a firm's total revenue and its total costs, including both the explicit and implicit costs, representing the financial gain exceeding the opportunity costs.

Total Revenue

The gross income of a company, which is the sum of money generated from its goods or services sold before deducting any costs.