The purchase of a new machine to replace the one that is worn out is:
A)not included in GDP.
B)included in gross investment.
C)considered a personal consumption expenditure.
D)not included in GNP.
E)an increase in inventories.

Question

Quizplus · Accepted Answer

The purchase of a new machine is classified as gross investment, which is an expenditure made by businesses to increase their physical capital. It is included in the calculation of GDP.

The Purchase of a New Machine to Replace the One