Which transaction 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 includes purchases made by businesses or individuals for goods or services that will be used in the production of other goods or services. The purchase of a play-gym set for a day-care business would be considered investment spending as it will be used to provide services and generate income. The other choices do not fall under the category of investment spending as they do not directly contribute to the production of goods or services. Purchasing shares of stock, buying a vehicle for personal use, or buying a condo are all considered financial investment and not spending that contributes to GDP.

Which Transaction Is Included in a Current Year's GDP as Investment