Which one of the following transactions is included in a current year's GDP as investment spending?
A)ABC company purchased 10,000 shares of IBM stock.
B)Ronnie bought a new BMW.
C)Anton purchased his friend's condo.
D)Maggie bought a play-gym set for her day-care business.

Question

Quizplus · Accepted Answer

Investment spending refers to the purchase of capital goods or equipment for business purposes. Therefore, Maggie buying a play-gym set for her day-care business is the only transaction that qualifies as investment spending in the given choices. Choices A, B, and C are not investment spending because they do not involve the purchase of capital goods for business purposes. Instead, they are purchases of financial investments, a consumer durable good, and a second-hand residential property, respectively.

Which One of the Following Transactions Is Included in a Current