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If you were to determine net domestic product (NDP) through the expenditures approach, the correct measure of investment spending to use ismultiple choice 2net private domestic investment because it includes depreciation.gross private domestic investment because it excludes depreciation.gross private domestic investment because it includes depreciation.net private domestic investment because it excludes depreciation.

Question

If you were to determine net domestic product (NDP) through the expenditures approach, the correct measure of investment spending to use ismultiple choice 2net private domestic investment because it includes depreciation.gross private domestic investment because it excludes depreciation.gross private domestic investment because it includes depreciation.net private domestic investment because it excludes depreciation.

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Solution

The correct measure of investment spending to use is gross private domestic investment because it includes depreciation.

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When gross private domestic investment exceeds depreciation, it can be concluded that:Multiple Choicenet investment is positive.net investment is negative.the economy is exporting more than it imports.the economy is importing more than it exports

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b. Gross domestic product does not include the value of the stocks and bonds bought and sold because these transactions are considered multiple choice 2economic investment, but should be counted as production of final goods and services.economic investment, and should not be counted as production of final goods and services.consumption expenditures, and should not be counted as production of final goods and services.consumption expenditures, but should be counted as production of final goods and services.

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