Given the following annual data, answer questions A through C. a. What is the value of gross...

Question:

Given the following annual data, answer questions A through C.

Billions of Dollars
New residential construction $500
Purchases of existing homes 250
Sales value of newly issued stocks and bonds 600
New physical capital 800
Depreciation 200
Household purchases of new furniture 50
Net change in firms' inventories 100
Production of new intermediate goods 700

a. What is the value of gross private domestic investment (GPDI)?

b. What is the value of net investment?

c. Are any intermediate goods included in the measure of gross investment?

Investment:

Investment spending is part of national income accounting. Investment spending is the purchase of goods that are going to be used to produce other goods. Thus, investment spending includes new residential property purchases, new machines and equipments and net changes in inventories of the firms.

Answer and Explanation:

In economics, investment is the purchase of goods that will be used in further production. Investment includes purchases of new physical capital, new...

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Gross Private Domestic Investment: Definition & Formula

from Introduction to Business: Homework Help Resource

Chapter 24 / Lesson 13
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