An increase in fixed investment spending that increases GDP occurs when

Question

Quizplus · Accepted Answer

Fixed investment spending refers to purchases made by businesses in order to increase their production capacity or improve their infrastructure. Therefore, the only option that involves a business making a purchase for this purpose is B, where a business is buying a new computer. Option A is considered consumption spending by a family, while option C does not involve the purchase of new goods and is instead a shift in already existing inventory. Option D involves government spending, which can increase GDP but is not considered fixed investment spending.

An Increase in Fixed Investment Spending That Increases GDP Occurs