Which of the following is included as investment in GDP?
i. Cars produced during the year but unsold at the end of the year.
Ii New capital equipment produced and purchased during the year.
iii. Purchases of a company's shares and bonds.
A) i and ii
B) i, ii and iii
C) iii only
D) i only
E) ii only

Question

Quizplus · Accepted Answer

Items i and ii are considered investments in GDP calculations. Unsold inventory, like cars, counts as investment because it represents production that occurred but wasn't sold. New capital equipment is a direct investment in the productive capacity of the economy. Purchases of shares and bonds (iii) are financial transactions and do not count as investment in the context of GDP, as they do not represent new production of goods or services.

Which of the Following Is Included as Investment in GDP