The investment component of GDP measures spending on
A)financial assets such as stocks and bonds.During recessions it declines by a relatively large amount.
B)residential construction,business equipment,business structures,and changes in inventory.During recessions it declines by a relatively large amount.
C)financial assets such as stocks and bonds.During recessions it declines by a relatively small amount.
D)residential construction,business equipment,business structures,and changes in inventory.During recessions it declines by a relatively small amount.

Question

Quizplus · Accepted Answer

The investment component of GDP measures spending on residential construction, business equipment, business structures, and changes in inventory. During recessions, it declines by a relatively large amount as businesses and households reduce their investment spending due to economic uncertainty and decreased demand for goods and services. Therefore, option B is the correct choice.

The Investment Component of GDP Measures Spending on