vI. Indicate which of the following is considered investment and will be include

Question

vI. Indicate which of the following is considered investment and will be included in the investment component when calculating GDP. For all the expenditures that will not be included in the investment component brietly explain the reason (a) purchase of foreign currency; (b) firm's expenditures on the construction of a new house; for the construction of a new stadium; (d) household's purchase of a new county house built in the previous year; (e) firm's purchase of a piece of land to build a new workshop; (f) purchase of gold bars; (g) purchase of antiques; (h) firm's expenditures on the construction of its branch in another country; (i) purchase of the painting of Salvador Dali by the national museum; () purchase of a painting of a modern artist by a collector; (k) expenditures on a new car that a household plans to rent out; (1) firm's purchase of new equipment to replace the worn out machines; (m) purchase of shares issued by domestic firms; (n) purchase of securities issued by foreign companies; (o) purchase of government bonds; (p) expenditures on the construction of a new building of the Central bank; (q) purchase of a new flat that a household plans to rent out; (r) an increase in the stock of unsold goods produced by a firm; (s) foreign firm's expenditures on new equipment produced by domestic firms; (t) foreign firm's purchase of a controlling stake in the domestic firm (c) government subsidy

Explanation / Answer

a Not. Purchase of foreign currency is not itself investment. It may be used for travelling etc.

B yes is investment

D Not. Things build in previous year are included in GDP of that year

E yes is investment

F yes

Can answer only 4 parts according to chegg policy. Please send other parts as separate question

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