With regard to national-income accounting,which of the following statements regarding investment (I_a)is correct?

Question

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In national-income accounting, investment refers to the creation of new capital assets, such as buildings and machinery, which includes housing construction. This is classified as investment expenditure because it adds to the capital stock, rather than consumption expenditure, which is spending on goods and services for immediate use. Choices A, B, C, and D are incorrect because the capital stock in this context does not include financial investments like stocks and bonds, the accumulation of inventories is considered current investment, rental payments are not counted as investment expenditures, and depreciation refers to the wear and tear on capital assets, not funds used to increase capital stock.

With Regard to National-Income Accounting,which of the Following Statements Regarding