Asked by Hussain Khudair on May 21, 2024
Verified
The largest sector of gross investment is
A) plant and equipment.
B) inventory.
C) residential housing.
D) stocks and bonds.
Gross Investment
The total amount spent on new capital assets before accounting for depreciation, reflecting an economy's investment levels.
Plant And Equipment
Physical assets of a business that are permanent structures or fixed machinery used in operations.
Inventory
The total amount of goods and materials held in stock by a business, intended for sale or production.
- Familiarize oneself with the structures and movement trends of gross private investment.
Verified Answer
KS
Keisha SandlinMay 27, 2024
Final Answer :
A
Explanation :
Plant and equipment (also called fixed investment) includes purchases of machinery, buildings, and other capital goods that are used to produce goods and services over a long period of time. This category typically represents the largest share of gross investment in the economy. Inventory investment, which represents purchases of goods that will be sold in the near future, is generally much smaller, and residential housing investment is typically smaller still. Stocks and bonds are not considered a form of gross investment, as they represent the transfer of ownership of existing assets rather than the creation of new ones.
Learning Objectives
- Familiarize oneself with the structures and movement trends of gross private investment.