Question

Zander read a report about the nation’s GDP from last year. The report talks about the investment expenditures. What is included in the GDP calculation of investment? Select one: a. Total real estate value. b. Stock market value of businesses c. additions to inventories. d. total value of capital stock.

Answer 1

c. additions to inventories.

Step-by-step explanation:

When you are calculating the GDP, investment includes:

• addition of new capital assets, e.g. new equipment, new machinery, or new facilities acquired by businesses (exchange of existing assets are not included in the GDP, only new ones)
• additions to inventories
• new houses or any type of building purchased by private households