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Which of the following DOES NOT represent an increase in aggregate investment spending? 1. the purchase of a newly built commercial facility by a computer retail firm. 2.The purchase of corporate bonds in the bond market. 3.The purchase of a laptop computer by an accounting firm to use in doing audits. 4.The purchase of a website design service to use for e-commerce.
Which of the following DOES NOT represent an increase in aggregate investment spending?
2.The purchase of corporate bonds in the bond market. |
Answer & Explanation (1)
Which of the following DOES NOT represent an increase in aggregate investment spending?
- the purchase of a newly built commercial facility by a computer retail firm.
2.The purchase of corporate bonds in the bond market.
3.The purchase of a laptop computer by an accounting firm to use in doing audits.
4.The purchase of a website design service to use for e-commerce.
Answer
- The purchase of corporate bonds in the bond market.
Explanation:
Aggregate investment spending includes purchase of goods in a given period of time, which are not used or consumed at present time and which are used to produce other goods, capital or services. Laptop is used to provide a service, commercial facility is used to provide a service, and finally, website design service is used for provision of a service. However, purchasing bonds does not qualify as aggregate investment spending as this is not use to produce other goods or services.
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