For the purposes of calculating GDP, investment includes:

Question

Quizplus · Accepted Answer

Investment, in the context of GDP calculation, includes spending on capital goods that will be used for future production. This includes new residential construction (like new homes), but does not include purchases of stocks, old automobiles, or government bonds, as these do not directly contribute to the production of new goods and services. Stocks and bonds are considered financial investments rather than investments in physical capital, and purchases of old automobiles do not add to the productive capacity of the economy.

For the Purposes of Calculating GDP, Investment Includes