Gross private domestic investment includes business:

Question

Quizplus · Accepted Answer

Gross private domestic investment includes purchases of capital goods (such as machinery and equipment), all new construction (both residential and commercial), and inventory investment (the addition of goods to inventories held by businesses). Therefore, option B, which includes all these elements, is the best choice. Option A is incorrect because it includes purchases of consumer durable goods, which are not considered part of investment spending. Option C is also incorrect because it excludes residential construction, which is included in gross private domestic investment. Option D is incorrect because it includes purchases of all types of durable goods, including those made by households, which are not part of business investment.

Gross Private Domestic Investment Includes Business