Which of the following would be considered investment in the calculation of GDP?(1 point)

Question

Responses

An individual purchases stock in a company.
An individual purchases stock in a company.

A school district deposits excess funds into a savings account.
A school district deposits excess funds into a savings account.

A manufacturing firm builds a new plant in Mexico.
A manufacturing firm builds a new plant in Mexico.

A child places money under his mattress for safe keeping.

Answer 1

In the calculation of GDP, investment refers to spending on goods that will be used for future production. This typically includes business investments in equipment and structures, as well as residential construction.

Given the options you provided, the choice that would be considered investment in terms of GDP calculation is:

A manufacturing firm builds a new plant in Mexico.

This is because the construction of a new plant is considered a capital investment, as it involves spending on infrastructure that will contribute to future production.

The other options (purchasing stock, depositing money in a savings account, and placing money under a mattress) do not qualify as investment in the GDP context, as they do not involve the production of new goods or services.