Which of the following would count as an investment expenditure in national income accounting?
A) General Motors hires 10 electrical engineers.
B) Boeing purchases a new metal stretching machine used to produce airplane wings.
C) Ms. Quantum buys 100 shares of Microsoft stock.
D) A large corporation spends $10,000 per month on long-distance phone charges.

Question

Quizplus · Accepted Answer

Investment expenditure includes purchases of physical capital goods such as machinery, equipment, and buildings that are used to produce other goods and services. Therefore, Boeing's purchase of a new metal stretching machine would be considered an investment expenditure. The other options do not involve the purchase of physical capital goods and would not be considered investment expenditures.

Which of the Following Would Count as an Investment Expenditure