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.

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Definitions:

Pareto Optimal

A situation in economics where resources are allocated in the most efficient manner, making it impossible to reallocate without making at least one individual worse off.

Trades

The action of buying and selling goods and services, which can occur domestically within a country or internationally between countries.

Societal Members

Individuals who constitute a society, participating in its culture, norms, and economic activities.

Perfectly Competitive Market

A market structure characterized by many buyers and sellers, freedom of entry and exit, and a homogeneous product, leading to efficient pricing.