Using the Expenditure Approach, Investment Includes

question 77

Multiple Choice

Using the expenditure approach, investment includes:

• A) household residential expenditures.
• B) firm structures, equipment, and inventories.
• C) fixed firm and household structures, equipment, and inventories.
• D) government and firm equipment expenditures.
• E) government defense and firm equipment expenditures.

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Definitions:

Overhead Costs

General expenses related to the operation of a business that are not directly attributed to creating a product or service.

Volume Variance

The difference between the budgeted and actual quantity of units sold or produced, affecting budget and operational planning.

Fixed Overhead

The costs that do not vary with the level of production or sales, such as rent, salaries, and insurance.

Controllable Variance

The difference between the actual and expected or budgeted figures of costs and revenues that management can directly influence or control through their actions.