Spending by Businesses on Things Such as Machines and Buildings

question 348

Multiple Choice

Spending by businesses on things such as machines and buildings which can be used to produce goods and services in the future is

• A) investment.
• B) consumption.
• C) consumption goods.
• D) savings.

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Definitions:

Differential Analysis

The process of comparing the costs and benefits of alternative decisions.

Cost Behaviors

The way in which costs change in relation to the level of activity or production volume.

Variable Costs

Costs that change in proportion to the level of activity or volume, such as materials and labor directly associated with the production.

Incremental Analysis

A decision-making process used to evaluate the financial impacts of different choices, focusing on the costs and benefits that change between alternatives.