In the National Income Accounts, Investment Includes

question 9

Multiple Choice

In the national income accounts, investment includes:

• A)​expenditures on durable consumer goods.
• B)​government construction of a new dam.
• C)​additions to business inventories.
• D)​purchases of used machinery by businesses.

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Definitions:

Disposable Income

The monetary provision for households post the calculation of income taxes dedicated to saving and spending.

Consumption

The use of goods and services by households, which is a primary component of the economy and influences economic growth.

Induced Consumption

Refers to the portion of consumer spending that increases or decreases with disposable income.

Disposable Income

Net funds allocated to households for their spending and saving post the application of income taxes.