When a Firm Buys a New Machine for Its Business

question 361

Multiple Choice

When a firm buys a new machine for its business, it is considered to be:

• A)consumption.
• B)investment spending.
• C)government spending.
• D)private saving.

---

Definitions:

Price Elasticity

An assessment of the responsiveness of product demand to variations in its cost.

Demand Curve

A graphical representation showing how the quantity of a good demanded by consumers changes as its price changes, holding other factors constant.

Cross-Price Elasticity

Measures the responsiveness of demand for one good to a change in the price of another good.

Goods Relationship

Refers to the connections and interactions between various goods, including how the production, consumption, or value of one can affect another.