The purchase of a new house is the one form of
A)investment that is financed by private saving rather than public saving.
B)household spending that is not counted as part of investment in the national income accounts.
C)household spending that is investment rather than consumption.
D)household spending that does not contribute to GDP.

Question

Quizplus · Accepted Answer

The purchase of a new house can be considered an investment because it contributes to the stock of physical capital in the economy. It is financed by household saving rather than public saving, making choice A incorrect. It is also counted as part of investment in the national income accounts, making choice B incorrect. Finally, it does contribute to GDP, making choice D incorrect.

The Purchase of a New House Is the One Form