Sail E0 Webinar
Question
Which of the following is not an investment expenditure in goods and services?
Options:
A .  Purchase of machinery
B .  An increase in business inventories
C .  Purchase of a house
D .  Expansion of the main plant of a company
Answer: Option C
Answer: (c)
Investment expenditure refers to the expenditure incurred either by an individual or a firm or the government for the creation of new capital assets like machinery, building etc.
Business inventories are goods that firms produce in one time period with the intent to sell later and they are counted as part of business investment. The purchase of a house cannot be considered an investment expenditure as it may be for personal use.

Was this answer helpful ?
Next Question

Submit Solution

Your email address will not be published. Required fields are marked *

Latest Videos

Latest Test Papers