In Which Spending Category Would You Enter the Following Transaction

question 124

Multiple Choice

In which spending category would you enter the following transaction? Company A successfully launches a hostile takeover of Company B, in which it purchases all the assets of Company B.

• A)Government purchases
• B)Net exports
• C)Investment
• D)Consumption
• E)None of these

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Definitions:

Gross National Product

A measure of a nation's total economic output, including the value of all goods and services produced by its citizens, regardless of where they are located.

Depreciation

A reduction in the value of an asset over time, due to wear and tear or obsolescence.

Intermediate Goods

Goods that are used as inputs in the production of final goods, not intended for final consumption.

Inventory

The total amount of goods and materials a business holds for the ultimate goal of resale or production.