Actual investment is the:
A) spending households engage in based on what they earn.
B) amount that firms spend on their workforces.
C) investment a firm makes into stocks and bonds to generate profit.
D) amount firms allocate to new capital resources and inventory accumulation.

Question

Quizplus · Accepted Answer

Actual investment refers to the amount of money that firms allocate towards purchasing new capital resources and inventory accumulation in order to expand their productive capacity and increase output in the future. Therefore, option D is the correct answer. Option A refers to consumption spending. Option B is not a part of investment, and Option C refers to financial investment rather than actual investment in physical capital.

Actual Investment Is The