Asked by Renee White on Jun 12, 2024
Verified
Which statement is false?
A) Residential home building fluctuates considerably from year to year.
B) Investment is the most volatile sector in our economy.
C) Gross investment is larger than net investment.
D) Inventory investment can be negative.
E) None is false
Residential Home Building
The process or business of creating new homes within residential areas, often involving construction firms, architects, and various contractors.
Volatile Sector
An industry or market segment known for high levels of price fluctuation, often due to changes in supply and demand, political instability, or other factors.
Gross Investment
Gross investment refers to the total amount of money spent on acquiring new capital assets or improving existing ones before accounting for depreciation.
- Understand the components and shifts in the patterns of gross private investment.
- Make distinctions between truthful and misleading statements on economic topics and business organization structures.
Verified Answer
RB
Rabia BilalJun 13, 2024
Final Answer :
E
Explanation :
All the statements provided are true. Residential home building does fluctuate significantly from year to year due to changes in economic conditions, interest rates, and other factors. Investment is indeed the most volatile component of GDP, experiencing larger fluctuations compared to other sectors like consumption or government spending. Gross investment is always larger than net investment because gross investment includes total spending on new capital, while net investment subtracts depreciation. Inventory investment can be negative if a company sells more from its inventory than it adds in a given period.
Learning Objectives
- Understand the components and shifts in the patterns of gross private investment.
- Make distinctions between truthful and misleading statements on economic topics and business organization structures.