When calculating GDP from the expenditure side,which of the following is true of the investment component,I_a?

Question

Quizplus · Accepted Answer

The investment component of GDP on the expenditure side includes changes in inventories, which includes both accumulation and decumulation. This component also includes business fixed investment, residential investment, and government investment in the economy. The transfer of houses between individuals is not considered as a part of investment in GDP calculations. The expansion of existing factories is also considered as a part of business fixed investment and thus included in GDP calculations. Therefore, option D is the correct answer.

When Calculating GDP from the Expenditure Side,which of the Following