An Example of an Increase in Gross Private Domestic Investment

question 48

Multiple Choice

An example of an increase in gross private domestic investment spending that also increases Gross Domestic Product (GDP) is when

• A) a family sells its home because of a transfer.
• B) a farmer buys a used tractor.
• C) inventories of new cars accumulate on the lots of car dealers.
• D) government increases spending on infrastructure.

---

Definitions:

Finished Goods Inventory

The stock of completed products that are ready to be sold but haven't been yet.

Direct Cost

A cost that can be easily and conveniently traced to a specified cost object.

Packaging

The process and materials used to protect, transport, and present goods for sale.

Leasing A Machine

Leasing a machine entails entering into a rental agreement to use a piece of equipment for a specified period in exchange for regular payments, without purchasing it outright.