Gross private domestic investment includes business
A)purchases of capital goods,all new construction,and purchases of consumer durable goods.
B)purchases of capital goods,all new construction,and inventory investment.
C)purchases of capital goods,all new commercial construction,and inventory investment.
D)purchases of capital goods,all new residential construction,and inventory investment.
E)purchases of all types of durable goods,all new construction,and inventory investment.

Question

Quizplus · Accepted Answer

Gross private domestic investment includes purchases of capital goods, which are long-lasting goods used in the production process, and all new construction activities. Additionally, it includes inventory investment, which is the change in the value of the goods that businesses hold in stock. Option B includes all these components, making it the correct choice. Option A and E are incorrect, as they include purchases of consumer durable goods, which are not considered as investment in the national accounts. Option C and D are also incorrect, as they do not include all types of construction activities that qualify as gross private domestic investment.

Gross Private Domestic Investment Includes Business