Final answer:
The purchase of a new retirement home by grandparents would be part of the investment component of GDP, as it's an addition to the housing stock.
Step-by-step explanation:
If your grandparents buy a new retirement home, this transaction will affect the investment component of GDP. Gross Domestic Product (GDP) consists of four main components: consumption, investment, government purchases, and net exports. Purchasing a new home is considered an investment because it adds to the housing stock and thus contributes to the fixed assets in the economy. It is not categorized under consumption as that component refers generally to goods and services consumed by households. It is not a government purchase unless the transaction is made by a government entity. It also does not affect net exports, as this transaction is domestic and does not involve international trade.