Which of the Following Is Included in the Investment Component

question 6

Multiple Choice

Which of the following is included in the investment component of GDP?

• A)households' purchases of newly constructed homes
• B)net additions to firms' inventories
• C)firms' purchases of capital equipment
• D)All of the above are correct.

---

Definitions:

Significant Influence

It refers to the power to participate in the financial and operating policy decisions of an investee but not control those policies.

Trading Security

A financial asset that is bought and sold with the intention of generating profits from short-term fluctuations in its price.

Retained Earnings

Profits that a company has kept or retained rather than distributing to shareholders as dividends.

Fair Value Method

An accounting approach that estimates the price of an asset or liability based on current market conditions.