The Purchase of a New Machine to Replace the One

question 41

Multiple Choice

The purchase of a new machine to replace the one that is worn out is:

• A)not included in GDP.
• B)included in gross investment.
• C)considered a personal consumption expenditure.
• D)not included in GNP.
• E)an increase in inventories.

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Definitions:

Acquisition

Acquisition refers to the process of obtaining control of another company or business entity through purchase, takeover, or another means, aimed at expanding operations or entering new markets.

Consolidated Retained Earnings

The cumulative amount of earnings not distributed as dividends to shareholders, reported in the consolidated financial statements of a parent company and its subsidiaries.

Business Combination

A transaction or event where an acquirer gains control over one or more businesses, often through the acquisition of equity interests or assets.

Common Stock

Shares entitling their holders to dividends that vary in amount and may even be missed, depending on the fortunes of the company.